Explaining Monetary Policy in Press Conferences

Michael Ehrmann and Marcel Fratzscher

International Journal of Central Banking, 2009, vol. 5, issue 2, 42-84

Abstract: The question of how best to communicate monetary policy decisions remains a highly topical issue among central banks. Focusing on the experience of the European Central Bank, this paper studies how explanations of monetary policy decisions at press conferences are perceived by financial markets. The empirical findings show that ECB press conferences provide substantial additional information to financial markets beyond that contained in the monetary policy decisions, and that the information content is closely linked to the characteristics of the decisions. Press conferences have on average had larger effects on financial markets than the corresponding policy decisions, with lower effects on volatility. Moreover, the Q&A part of the press conference fulfills a clarification role, in particular during periods of large macroeconomic uncertainty.

JEL-codes: E52 E58 G14 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (82)

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Related works:
Working Paper: Explaining monetary policy in press conferences (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2009:q:2:a:2

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