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Chorus in the Cacophony: Dissent and Policy Communication of India’s Monetary Policy Committee

Author

Listed:
  • Rounak Sil
  • Unninarayanan Kurup
  • Ashima Goyal
  • Apoorva Singh
  • Rajendra Narayan Paramanik

Abstract

Using minutes of consecutive Monetary Policy Committee (MPC) meetings of the Indian central bank, we have constructed two novel measures of implicit dissent at the individual level as well as across groups. We have used VADER sentiment analysis to arrive at the proposed measures and investigated their influence on anchoring Indian growth and inflation forecasts. Our empirical findings show discordance among members increases forecast accuracy. This implies promoting an environment that supports nuanced opinions could improve policy outcomes.

Suggested Citation

  • Rounak Sil & Unninarayanan Kurup & Ashima Goyal & Apoorva Singh & Rajendra Narayan Paramanik, 2024. "Chorus in the Cacophony: Dissent and Policy Communication of India’s Monetary Policy Committee," Applied Economics Letters, Taylor & Francis Journals, vol. 31(18), pages 1900-1906, October.
    • Handle: RePEc:taf:apeclt:v:31:y:2024:i:18:p:1900-1906
    DOI: 10.1080/13504851.2023.2208823
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    2. Su, Shiwei & Ahmad, Ahmad Hassan & Wood, Justine & Jia, Songbo, 2025. "Monetary policy analysis using natural language processing: Evaluating the People's Bank of China's minutes and report summary with the Taylor Rule," Economic Modelling, Elsevier, vol. 149(C).
    3. Spandan Banerjee & Rajendra N. Paramanik & Rounak Sil & Unninarayanan Kurup, 2024. "When all speak, should we listen? A cross‐country analysis of disagreement in policymaking and its implications," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 53(2), July.

    More about this item

    JEL classification:

    • 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
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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