Perception is Always Right: The CNBâ€™s Monetary Policy in the Media
In this paper we analyze the favorableness and extent of the media coverage of the CNBâ€™s monetary policy decisions in the period of 2002â€“-2007. We identify the factors explaining the variance in these two dimensions using an extensive set of articles published in the four most relevant Czech daily broadsheets immediately after monetary policy meetings. We take account of parameters of the CNBâ€™s actual monetary policy decisions and related communication as well as variables characterizing the general economic environment that prevailed at the times of the individual meetings. The most appealing results are that those CNBâ€™s decisions that surprise financial markets are âˆ’ if needed âˆ’ not negatively perceived by the media and that the media welcomes interest rate changes. Therefore, from the media coverage point of view, there is no need for too much smoothing. Simultaneously, our analyses shed some light on how the media tends to report on (economic) events in general.
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