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

Asif Mahmood and Muhammad Zuhair Munawar (zuhair.munawar@sbp.org.pk)
Additional contact information
Muhammad Zuhair Munawar: State Bank of Pakistan

No 78, SBP Working Paper Series from State Bank of Pakistan, Research Department

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.

Keywords: monetary policy; central bank; communication (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2016-08
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sbp.org.pk/publications/wpapers/2016/wp78.pdf First version, 2016 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.sbp.org.pk/publications/wpapers/2016/wp78.pdf [301 Moved Permanently]--> https://www.sbp.org.pk/publications/wpapers/2016/wp78.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sbp:wpaper:78

Access Statistics for this paper

More papers in SBP Working Paper Series from State Bank of Pakistan, Research Department Contact information at EDIRC.
Bibliographic data for series maintained by Faisal Saleem (faisal.saleem@sbp.org.pk).