The effect of diverging communication: The case of the ECB and the Bundesbank

Peter Tillmann and Andreas Walter

Economics Letters, 2019, vol. 176, issue C, 68-74

Abstract: When members of monetary policy committees communicate with the public, the resulting cacophony of voices is often considered a source of confusion. We associate each speech delivered by the presidents of the ECB and the Bundesbank since 2008 with a tone score and construct a measure of diverging tone. Shocks to the tone divergence between the Eurosystem’s main protagonists drive volatility, policy uncertainty and risk premia.

Keywords: Central bank communication; Diverging tone; Speeches; Text analysis; Monetary transmission (search for similar items in EconPapers)
JEL-codes: E32 E43 E52 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:176:y:2019:i:c:p:68-74

DOI: 10.1016/j.econlet.2018.12.035

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