Central Bank Communication in Times of Uncertainty: AI-assisted Decoding of Recent Trends in Europe

Francesca Caselli, Luisa Charry, Larry Cui, Pragyan Deb, Allan Dizioli, Alexandra Fotiou, Ben Park and Sebastian Weber

No 2026/133, IMF Working Papers from International Monetary Fund

Abstract: More frequent large macroeconomic shocks since the global financial crisis have entrenched uncertainty, particularly in Europe. This has increased the premium on central bank communication in guiding expectations and strengthening macroeconomic resilience. European central banks have responded by adapting their communication toolkits and styles. This study provides a systematic assessment of recent central bank communication across advanced and emerging European economies, combining a survey of institutional communication frameworks with novel text-miningbased indicators on monetary policy guidance in these economies over 2009-2025. While communication toolkits are broadly similar, their intensity and transparency differ markedly, with central banks in advanced economies making greater use of forward-looking tools. Central banks in both groups respond primarily to inflation uncertainty. However, communication strategies diverge, as central banks in advanced economies increasingly shift toward forward-looking language, whereas those in emerging markets shift toward more backward-looking communication. These patterns highlight credibility and institutional capacity as key determinants of central bank communication under uncertainty.

Keywords: Central bank communication; uncertainty; forward guidance; monetary policy; central bank uncertainty; IMF working papers; communication in time; monetary policy uncertainty; Inflation; Central bank policy rate; Market interest rates; Monetary policy communication; COVID-19; Europe; Global; Middle East (search for similar items in EconPapers)
Pages: 40
Date: 2026-06-26
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