Measuring Communication Quality of Interest Rate Announcements

Jonathan Benchimol, Itamar Caspi and Kazinnik Sophia
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Kazinnik Sophia: Quantitative Supervision and Research, Federal Reserve Bank of Richmond, Charlotte, NC, United States

The Economists' Voice, 2023, vol. 20, issue 1, 43-53

Abstract: We use text-mining techniques to measure the accessibility and quality of information within the texts of interest rate announcements published by the Bank of Israel over the past decade. We find that comprehension of interest rate announcements published by the Bank of Israel requires fewer years of education than interest rate announcements published by the Federal Reserve and the European Central Bank. In addition, we show that the sentiment within these announcements is aligned with economic fluctuations. We also find that textual uncertainty is correlated with the volatility of the domestic financial market.

Keywords: text mining; central bank communication; monetary policy; financial stability (search for similar items in EconPapers)
JEL-codes: A12 E44 E52 E58 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Working Paper: Measuring communication quality of interest rate announcements (2023)
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DOI: 10.1515/ev-2022-0023

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