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Measuring Communication Quality of Interest Rate Announcements

Author

Listed:
  • Benchimol Jonathan

    (Research Department, Bank of Israel, Jerusalem, Israel)

  • Caspi Itamar

    (Research Department, Bank of Israel, Jerusalem, Israel)

  • Kazinnik Sophia

    (Quantitative Supervision and Research, Federal Reserve Bank of Richmond, Charlotte, NC, United States)

Abstract

We use text-mining techniques to measure the accessibility and quality of information within the texts of interest rate announcements published by the Bank of Israel over the past decade. We find that comprehension of interest rate announcements published by the Bank of Israel requires fewer years of education than interest rate announcements published by the Federal Reserve and the European Central Bank. In addition, we show that the sentiment within these announcements is aligned with economic fluctuations. We also find that textual uncertainty is correlated with the volatility of the domestic financial market.

Suggested Citation

  • Benchimol Jonathan & Caspi Itamar & Kazinnik Sophia, 2023. "Measuring Communication Quality of Interest Rate Announcements," The Economists' Voice, De Gruyter, vol. 20(1), pages 43-53, June.
    • Handle: RePEc:bpj:evoice:v:20:y:2023:i:1:p:43-53:n:7
    DOI: 10.1515/ev-2022-0023
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    Cited by:

    1. Cory Baird & Jonathan Benchimol & Vira Vyshnevska & Wook Sohn & Iegor Vyshnevskyi, 2026. "The monetary policy statement database," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Data science in central banking, volume 67, Bank for International Settlements.
    2. Liu, Dayu & Li, Yingying & Zhao, Tingting & Xu, Kaishuo, 2026. "Facing crisis, what should the central bank say?," Finance Research Letters, Elsevier, vol. 90(C).
    3. Vyshnevskyi, Iegor & Jombo, Wytone & Sohn, Wook, 2024. "The clarity of monetary policy communication and financial market volatility in developing economies," Emerging Markets Review, Elsevier, vol. 59(C).
    4. Curti, Filippo & Kazinnik, Sophia, 2023. "Central bank communication and website characteristics," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 1216-1241.

    More about this item

    Keywords

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    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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