IDEAS home Printed from https://ideas.repec.org/p/sbp/wpaper/78.html
   My bibliography  Save this paper

Words Matter: A Textual Analysis of SBP’s Monetary Policy Reviews

Author

Listed:
  • Asif Mahmood

    () (State Bank of Pakistan)

  • Muhammad Zuhair Munawar

    () (State Bank of Pakistan)

Abstract

In this paper we perform a textual analysis of monetary policy statements issued during the past ten years by State Bank of Pakistan and compare them with policy reviews of seven selected central banks from regional, emerging and advanced economies. Broadly, we divided our analysis into three parts. In the first part, we attempt to estimate the contribution of macroeconomic contents in the monetary policy analysis of selected central banks. The second part deals with the decomposition of macroeconomic contents in driving the policy decisions. In the last section, we attempt to measure the forward-looking content in the monetary policy reviews and also their predictive power. Key findings suggest that, across the sample, trends in inflation and developments in external sector play an important role in driving the monetary policy stance. Also, it is found that the inflation targeting central banks have more forward-looking content in their policy reviews than non-inflation targeters. On the basis of empirical estimation, the former central banks are also found to be more proactive in adjusting the policy stance to given macroeconomic conditions and their outlook.

Suggested Citation

  • Asif Mahmood & Muhammad Zuhair Munawar, 2016. "Words Matter: A Textual Analysis of SBP’s Monetary Policy Reviews," SBP Working Paper Series 78, State Bank of Pakistan, Research Department.
  • Handle: RePEc:sbp:wpaper:78
    as

    Download full text from publisher

    File URL: http://www.sbp.org.pk/publications/wpapers/2016/wp78.pdf
    File Function: First version, 2016
    Download Restriction: no

    More about this item

    Keywords

    monetary policy; central bank; communication;

    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

    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:sbp:wpaper:78. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Faisal Saleem). General contact details of provider: http://edirc.repec.org/data/sbpgvpk.html .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.