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Writing Clearly: ECB’s Monetary Policy Communication

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  • Mr. Martin Cihak
  • Ms. Katerina Smídková
  • Mr. Aleš Bulíř

Abstract

The paper presents a methodology for measuring the clarity of central bank communication, illustrating it with the case of the European Central Bank (ECB) in 1999-2007. The analysis identifies the ECB's written communication as clear about 95 percent of instances, which is comparable to, or even better than, other central banks for which a similar analysis is available. We also find that the additional information contained in the ECB's Monthly Bulletins helps to improve communication clarity compared to ECB's press releases. In particular, the Bulletins contain useful clarifying information on individual inflation factors and the overall forecast risk; in contrast, the bulletin's communication on monetary shocks has a negative, albeit small, impact on clarity.

Suggested Citation

  • Mr. Martin Cihak & Ms. Katerina Smídková & Mr. Aleš Bulíř, 2008. "Writing Clearly: ECB’s Monetary Policy Communication," IMF Working Papers 2008/252, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2008/252
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    Cited by:

    1. Thiago Cacicedo Cidad & Gabriel Caldas Montes, 2016. "Does Central Bank’S Perception Regarding The State Of The Economy Affect Entrepreneurs’ Expectations? Are Entrepreneurs’ Expectations Important For Investment? Empirical Evidence From Brazil," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 035, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    2. Allard, Julien & Catenaro, Marco & Vidal, Jean-Pierre & Wolswijk, Guido, 2013. "Central bank communication on fiscal policy," European Journal of Political Economy, Elsevier, vol. 30(C), pages 1-14.
    3. Ales Bulír & Martin Cihák & David-Jan Jansen, 2011. "Clarity of Central Bank Communication About Inflation," DNB Working Papers 333, Netherlands Central Bank, Research Department.

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