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Enhancing central bank communications using simple and relatable information

David Bholat, Nida Broughton, Janna Ter Meer and Eryk Walczak

Journal of Monetary Economics, 2019, vol. 108, issue C, 1-15

Abstract: Central bankers and the central banking literature are increasingly attuned to the importance of communications as a policy tool. However, less is known about how central bank communications should be drafted for maximal impact. Our paper contributes new insights in this regard. Using a large-scale online experiment with a sample representative of the UK population, the paper documents the communicative techniques that increase public comprehension and trust in monetary and macroeconomic policy messages. Key findings include that the simplification of language increases public comprehension more than the inclusion of visuals, and that public comprehension can be improved by making monetary policy messages relatable to people's lives. Relatable content also increases the public's trust in central bank communications, and improves people's perceptions of the central bank. Our findings shed light on how central banks can improve communication with the public at a time when trust in public institutions has fallen, while the responsibilities delegated to central banks have increased.

Keywords: Central bank communications; Central bank legitimacy; Macroeconomic and monetary policy experiments; Behavioural economics; Bank of England (search for similar items in EconPapers)
JEL-codes: A12 A13 A29 C21 C83 C90 C91 C93 D83 D91 E52 E58 E70 G41 M38 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1016/j.jmoneco.2019.08.007

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