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Which Text Method to Choose for Analysing Central Bank Communication? A Comparison of Artificial Intelligence and Previous Techniques

Author

Listed:
  • Zalan Kocsis

    (Magyar Nemzeti Bank)

  • Monika Matrai-Pitz

    (Magyar Nemzeti Bank)

Abstract

Our study compares the characteristics of text analysis methods on communications text samples of the US Federal Reserve and four Central and Eastern European central banks. Based on our results, methods based on BERT-type models are the most accurate at capturing the monetary policy, real economic and inflation information contained in central bank texts, outperforming OpenAI GPT-4.1 and GPT-5 models. BERT-type methods are faster than GPT models and can be run offline without a subscription, but their disadvantages are that the models require separate training, which entails hardware and labour costs, and that modifying the method is cumbersome. Conversely, GPT models are more flexible and have proven to be more accurate on new central bank samples. The dictionary-based methods used as benchmarks are significantly less accurate, but their use may be justified in certain cases due to their speed, cost-free operation and the transparency of the method.

Suggested Citation

  • Zalan Kocsis & Monika Matrai-Pitz, 2025. "Which Text Method to Choose for Analysing Central Bank Communication? A Comparison of Artificial Intelligence and Previous Techniques," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 24(4), pages 34-64.
    • Handle: RePEc:mnb:finrev:v:24:y:2025:i:4:p:34-64
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    File URL: https://hitelintezetiszemle.mnb.hu/sw/static/file/fer-24-4-st3-kocsis-matrai-pitz.pdf
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    References listed on IDEAS

    as
    1. Tatiana Evdokimova & Piroska Nagy Mohacsi & Olga Ponomarenko & Elina Ribakova, 2023. "Central banks and policy communication: How emerging markets have outperformed the Fed and ECB," Working Paper Series WP23-10, Peterson Institute for International Economics.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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    JEL classification:

    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • 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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