IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2505.17048.html
   My bibliography  Save this paper

Words That Unite The World: A Unified Framework for Deciphering Central Bank Communications Globally

Author

Listed:
  • Agam Shah
  • Siddhant Sukhani
  • Huzaifa Pardawala
  • Saketh Budideti
  • Riya Bhadani
  • Rudra Gopal
  • Siddhartha Somani
  • Michael Galarnyk
  • Soungmin Lee
  • Arnav Hiray
  • Akshar Ravichandran
  • Eric Kim
  • Pranav Aluru
  • Joshua Zhang
  • Sebastian Jaskowski
  • Veer Guda
  • Meghaj Tarte
  • Liqin Ye
  • Spencer Gosden
  • Rutwik Routu
  • Rachel Yuh
  • Sloka Chava
  • Sahasra Chava
  • Dylan Patrick Kelly
  • Aiden Chiang
  • Harsit Mittal
  • Sudheer Chava

Abstract

Central banks around the world play a crucial role in maintaining economic stability. Deciphering policy implications in their communications is essential, especially as misinterpretations can disproportionately impact vulnerable populations. To address this, we introduce the World Central Banks (WCB) dataset, the most comprehensive monetary policy corpus to date, comprising over 380k sentences from 25 central banks across diverse geographic regions, spanning 28 years of historical data. After uniformly sampling 1k sentences per bank (25k total) across all available years, we annotate and review each sentence using dual annotators, disagreement resolutions, and secondary expert reviews. We define three tasks: Stance Detection, Temporal Classification, and Uncertainty Estimation, with each sentence annotated for all three. We benchmark seven Pretrained Language Models (PLMs) and nine Large Language Models (LLMs) (Zero-Shot, Few-Shot, and with annotation guide) on these tasks, running 15,075 benchmarking experiments. We find that a model trained on aggregated data across banks significantly surpasses a model trained on an individual bank's data, confirming the principle "the whole is greater than the sum of its parts." Additionally, rigorous human evaluations, error analyses, and predictive tasks validate our framework's economic utility. Our artifacts are accessible through the HuggingFace and GitHub under the CC-BY-NC-SA 4.0 license.

Suggested Citation

  • Agam Shah & Siddhant Sukhani & Huzaifa Pardawala & Saketh Budideti & Riya Bhadani & Rudra Gopal & Siddhartha Somani & Michael Galarnyk & Soungmin Lee & Arnav Hiray & Akshar Ravichandran & Eric Kim & P, 2025. "Words That Unite The World: A Unified Framework for Deciphering Central Bank Communications Globally," Papers 2505.17048, arXiv.org.
  • Handle: RePEc:arx:papers:2505.17048
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2505.17048
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ahrens, Maximilian & Erdemlioglu, Deniz & McMahon, Michael & Neely, Christopher J. & Yang, Xiye, 2025. "Mind your language: Market responses to central bank speeches," Journal of Econometrics, Elsevier, vol. 249(PC).
    2. Filippo Occhino, 2020. "Quantitative Easing and Direct Lending in Response to the COVID-19 Crisis," Working Papers 20-29, Federal Reserve Bank of Cleveland.
    3. Kazinnik, Sophia & Papell, David H., 2021. "Monetary policy rules in practice: The case of Israel," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 308-320.
    4. Stephen Hansen & Michael McMahon & Matthew Tong, 2019. "The long-run information effect of central bank communication," Bank of England working papers 777, Bank of England.
    5. Matteo Barigozzi & Claudio Lissona & Lorenzo Tonni, 2024. "Large datasets for the Euro Area and its member countries and the dynamic effects of the common monetary policy," Papers 2410.05082, arXiv.org.
    6. Ehrmann, Michael & Talmi, Jonathan, 2020. "Starting from a blank page? Semantic similarity in central bank communication and market volatility," Journal of Monetary Economics, Elsevier, vol. 111(C), pages 48-62.
    7. Michael Ehrmann & Marcel Fratzscher, 2007. "Communication by Central Bank Committee Members: Different Strategies, Same Effectiveness?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(2‐3), pages 509-541, March.
    8. Willem H. Buiter, 2008. "Central banks and financial crises," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 495-633.
    9. Olivier Coibion & Yuriy Gorodnichenko & Michael Weber, 2022. "Monetary Policy Communications and Their Effects on Household Inflation Expectations," Journal of Political Economy, University of Chicago Press, vol. 130(6), pages 1537-1584.
    10. Ana Aguilar & Fernando Pérez-Cervantes, 2022. "Communication, monetary policy, and financial markets in Mexico," BIS Working Papers 1025, Bank for International Settlements.
    11. Friedman, Benjamin Morton, 2010. "Learning From The Crisis: What Can Central Banks Do?," Scholarly Articles 8895183, Harvard University Department of Economics.
    12. Apel Mikael & Grimaldi Marianna Blix, 2014. "How Informative Are Central Bank Minutes?," Review of Economics, De Gruyter, vol. 65(1), pages 53-76, April.
    13. Hansen, Stephen & McMahon, Michael & Tong, Matthew, 2019. "The long-run information effect of central bank communication," Journal of Monetary Economics, Elsevier, vol. 108(C), pages 185-202.
    14. Gerald Epstein, 2007. "Central banks as agents of employment creation," Working Papers 38, United Nations, Department of Economics and Social Affairs.
    15. Ivrendi, Mehmet & Yildirim, Zekeriya, 2013. "Monetary policy shocks and macroeconomic variables: Evidence from fast growing emerging economies," Economics Discussion Papers 2013-61, Kiel Institute for the World Economy (IfW Kiel).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin Baumgaertner & Johannes Zahner, 2021. "Whatever it takes to understand a central banker - Embedding their words using neural networks," MAGKS Papers on Economics 202130, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    2. Baranowski, Paweł & Doryń, Wirginia & Łyziak, Tomasz & Stanisławska, Ewa, 2021. "Words and deeds in managing expectations: Empirical evidence from an inflation targeting economy," Economic Modelling, Elsevier, vol. 95(C), pages 49-67.
    3. Yuriy Gorodnichenko & Tho Pham & Oleksandr Talavera, 2023. "The Voice of Monetary Policy," American Economic Review, American Economic Association, vol. 113(2), pages 548-584, February.
    4. Tim Munday & James Brookes, 2021. "Mark my words: the transmission of central bank communication to the general public via the print media," Bank of England working papers 944, Bank of England.
    5. Curti, Filippo & Kazinnik, Sophia, 2023. "Central bank communication and website characteristics," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 1216-1241.
    6. Ehrmann, Michael & Gnan, Phillipp & Rieder, Kilian, 2023. "Central Bank Communication by ??? The Economics of Public Policy Leaks," CEPR Discussion Papers 18152, C.E.P.R. Discussion Papers.
    7. Donato Masciandaro & Oana Peia & Davide Romelli, 2024. "Central bank communication and social media: From silence to Twitter," Journal of Economic Surveys, Wiley Blackwell, vol. 38(2), pages 365-388, April.
    8. Bholat, David & Broughton, Nida & Ter Meer, Janna & Walczak, Eryk, 2019. "Enhancing central bank communications using simple and relatable information," Journal of Monetary Economics, Elsevier, vol. 108(C), pages 1-15.
    9. Jonne Lehtimäki & Marianne Palmu, 2022. "Who Should You Listen to in a Crisis? Differences in Communication of Central Bank Policymakers," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 11(3), pages 33-57.
    10. Christopher S. Sutherland, 2020. "Forward Guidance and Expectation Formation: A Narrative Approach," Staff Working Papers 20-40, Bank of Canada.
    11. Donato Masciandaro & Davide Romelli & Gaia Rubera, 2021. "Monetary policy and financial markets: evidence from Twitter traffic," BAFFI CAREFIN Working Papers 21160, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    12. Hayo, Bernd & Henseler, Kai & Steffen Rapp, Marc & Zahner, Johannes, 2022. "Complexity of ECB communication and financial market trading," Journal of International Money and Finance, Elsevier, vol. 128(C).
    13. Hubert, Paul & Labondance, Fabien, 2021. "The signaling effects of central bank tone," European Economic Review, Elsevier, vol. 133(C).
    14. Parle, Conor, 2022. "The financial market impact of ECB monetary policy press conferences — A text based approach," European Journal of Political Economy, Elsevier, vol. 74(C).
    15. Giacomo Caterini, 2020. "La comunicazione della Banca Centrale dei Caraibi Orientali: un?analisi testuale (On the communication of the Eastern Caribbeans Central Bank: A textual analysis)," Moneta e Credito, Economia civile, vol. 73(289), pages 57-82.
    16. Ahrens, Maximilian & Erdemlioglu, Deniz & McMahon, Michael & Neely, Christopher J. & Yang, Xiye, 2025. "Mind your language: Market responses to central bank speeches," Journal of Econometrics, Elsevier, vol. 249(PC).
    17. Linas Jurkšas & Rokas Kaminskas, 2023. "ECB monetary policy communication: does it move euro area yields?," Bank of Lithuania Discussion Paper Series 29, Bank of Lithuania.
    18. Michael Ehrmann & Sarah Holton & Danielle Kedan & Gillian Phelan, 2024. "Monetary Policy Communication: Perspectives from Former Policymakers at the ECB," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 56(4), pages 837-864, June.
    19. Douglas Kiarelly Godoy de Araujo & Nikola Bokan & Fabio Alberto Comazzi & Michele Lenza, 2025. "Word2Prices: embedding central bank communications for inflation prediction," BIS Working Papers 1253, Bank for International Settlements.
    20. Jean-Charles Bricongne & Baptiste Meunier & Raquel Caldeira, 2024. "Should Central Banks Care About Text Mining? A Literature Review," Working papers 950, Banque de France.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2505.17048. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.