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When the central banks are all ears? Examining the communication spillovers over time

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  • Shrimali, Suruchi
  • Ahmad, Wasim

Abstract

We investigate a new dimension of monetary policy spillover by analysing the sentiment of speeches for twenty central banks between 2000 and 2024. We add to the existing literature by highlighting the temporal relevance of communication spillovers. We observe that the total sentiment spillover varies between 22% to 57%. The findings also reveal key spillover dynamics during global and domestic crises, highlighting the influential role of the Federal Reserve in this network. The macroeconomic conditions in the United States (US) are a major driver of these spillovers. The zero-lower bound in the US accounts for 24% of the variation in overall sentiment spillovers. We contribute to the discussion on the relevance of communication as a policy tool and to the debate on whether central banks are all ears.

Suggested Citation

  • Shrimali, Suruchi & Ahmad, Wasim, 2025. "When the central banks are all ears? Examining the communication spillovers over time," Finance Research Letters, Elsevier, vol. 86(PE).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pe:s1544612325019671
    DOI: 10.1016/j.frl.2025.108713
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    Keywords

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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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