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With the growing importance of central bank communication, both with markets and with a wider audience, there remain important questions regarding the channels through which communication has effects, and the best ways to communicate with different audiences, via different media, and about different topics. Research in this area is characterised by complementary theoretical, empirical and experimental approaches to these questions. This RPN seminar series aims to showcase leading research from academic and policy researchers, and to bring together this diverse range of research from across fields and using different methodological approaches. Most importantly, the series aims to serve as part of an on-going dialogue between interested researchers as well as practitioners in central banks.

Join us for the second session in this Seminar series where Michael Weber will give an overview talk on "Central bank communication with ordinary people: The role of medium, message and messenger", with a focus on diversity and communication based on his joint paper with Francesco D’Acunto and Andreas Fuster: Diverse Policy Committees Can Reach Underrepresented Groups (Free download here: https://cepr.online/diverse-policy)

Organizer:

Michael McMahon (Oxford University and CEPR)
 

Schedule:

Seminars will take place every month on a Thursday at 3pm UK time (4 pm CET and 10AM EST) and last for 75 minutes.

Confirmed dates:

  • 13th January: Alan Blinder (Princeton University)
  • 10th February: Michael Weber (University of Chicago, Booth School of Business and CEPR)
  • 3rd March
  • 7th April
  • 5th May
  • 2nd June
  • 7th July
  • -- August summer break --
  • 1st September
  • 6th October
  • 10th November
  • 1st December

Format:

Each seminar will consist of a 60 minute presentation, followed by 15 minutes of open discussion. During the presentation, the audience will be automatically muted and may submit questions using the Q&A facility. The moderator will collect clarifying questions and a few questions of general interest and relay them to the speaker at intervals, ensuring the flow of the seminar. The last 15 minutes of the event will be reserved for an open discussion, where participants may raise their hand to ask questions live, directly to the speaker.

Seminars may be recorded. Please note that you may be recorded if you speak during the seminar.

Abuse of the seminar will not be tolerated.

Michael Ehrmann, Sarah Holton, Danielle Kedan, Gillian Phelan, 17 January 2022

Central bank communication, like monetary policy itself, has evolved significantly since the global financial crisis. This column reports on a survey among former ECB policymakers on the ECB’s monetary policy communication, which provides broad support for recent innovations in communication practices and suggests that communication with expert audiences is generally adequate. Nevertheless, it highlights some room for improvement along several dimensions, in particular related to communication with the wider public.

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Join us for a new monthly seminar series in 2022:

Central Bank Communication

Thursdays, 10AM (EST), 3PM (GMT), 4PM (CET)

Next session: Thursday 3 March

Panel on:

Central Bank Communication and Information Effects

Register

With the growing importance of central bank communication, both with markets and with a wider audience, there remain important questions regarding the channels through which communication has effects, and the best ways to communicate with different audiences, via different media, and about different topics. Research in this area is characterised by complementary theoretical, empirical and experimental approaches to these questions. This RPN seminar series aims to showcase leading research from academic and policy researchers, and to bring together this diverse range of research from across fields and using different methodological approaches. Most importantly, the series aims to serve as part of an on-going dialogue between interested researchers as well as practitioners in central banks.

Join us for the March session where Michael Bauer, Anna Cieslak and Giovanni Ricco will join the panel on "Central Bank Communication and Information Effects". 
 

Organizer:

Michael McMahon (Oxford University and CEPR)
 

Schedule:

Seminars will take place every month on a Thursday at 3pm UK time (4 pm CET and 10AM EST) and last for 75 minutes.

Confirmed dates:

  • 13th January
  • 10th February
  • 3rd March
  • 7th April
  • 5th May
  • 2nd June
  • 7th July
  • -- August summer break --
  • 1st September
  • 6th October
  • 10th November
  • 1st December

Format:

Each seminar will consist of a 60 minute presentation, followed by 15 minutes of open discussion. During the presentation, the audience will be automatically muted and may submit questions using the Q&A facility. The moderator will collect clarifying questions and a few questions of general interest and relay them to the speaker at intervals, ensuring the flow of the seminar. The last 15 minutes of the event will be reserved for an open discussion, where participants may raise their hand to ask questions live, directly to the speaker.

Seminars may be recorded. Please note that you may be recorded if you speak during the seminar.

Abuse of the seminar will not be tolerated.

 
 

 

Register

The RPN on Central Bank Communication was established in October 2018. The Director of the RPN is Professor Michael McMahon (University of Oxford and CEPR), who provides academic leadership for the network. McMahon is a Professor in the Department of Economics at the University of Oxford and Fellow at St Hugh's College. He is also a CEPR Research Fellow and an Associate at the Nuffield Centre for Applied Macro Policy at Oxford University (NuCamp), Centre for Macroeconomics (LSE), CAGE (Warwick) and the Centre for Applied Macroeconomic Analysis (ANU).

The Director is supported by an Executive Committee, chaired by Michael McMahon and made up of Gabriel Glöcker (Directorate General Communications, European Central Bank) and Michael Ehrmann (Directorate General Research, European Central Bank and CEPR).

 

In Do Hwang, Thomas Lustenberger, Enzo Rossi, 12 May 2021

Central bank communication has become an important policy tool over the past 20 years. This column uses survey data to show that business executives tend to associate a greater volume of speeches from the central bank with the central bank having less of an impact on the economy. Importantly, this effect stems not from speeches given by governors, but by other board members.

Yuriy Gorodnichenko, Tho Pham, Oleksandr Talavera, 25 April 2021

While the effectiveness of central bank’s verbal communication is well documented, little is known about the effectiveness of communication via non-verbal channels. This column discusses vocal features of Federal Open Market Committee communication and examines the impacts on financial markets. The results suggest that tone of voice can contain distinct information not captured in the texts of press conferences. A positive voice tone can lead to higher share prices and decreases in volatility, highlighting the importance of voice control for central bank communication. 

Michael Bordo, Andrew Levin, Mickey Levy, Arunima Sinha, 27 January 2021

COVID-19 has led to an unprecedented level of economic uncertainty, which remains elevated even to this day. Given the substantial dispersion in forecasts, this column underscores the rationale for central banks to incorporate scenario analysis into their policy deliberations and communications. To show the practicality of this approach, it describes three illustrative scenarios formulated last spring to span the range of plausible outcomes for the US economy at that time. 

Saskia ter Ellen, Vegard H. Larsen, Leif Anders Thorsrud, 08 December 2020

Though the transmission channels of central bank communication to financial institutions are well researched, less is known about how they relay information to the public at large. This column shows how central bank communication indirectly reaches the general public by affecting news media coverage on topics of particular relevance for monetary policy decisions. The findings suggest that the media, and how it acts as an information intermediary, can have a sizeable effect on economic outcomes.

Paweł Baranowski, Wirginia Doryń, Tomasz Łyziak, Ewa Stanisławska, 22 October 2020

To achieve macroeconomic stabilisation, central banks attempt to manage the expectations of the private sector. Decisions on short-term interest rates and communication can both impact expectations, but communication is especially important under the effective lower bound, when the room to move interest rates down is limited. Using data from Poland, this column shows that while monetary policy shapes the expectations of the private sector through both communication and interest rate decisions, the impact can differ depending on the variable forecasted and on the forecasting horizon.

Carlo Altavilla, Refet Gürkaynak, Roberto Motto, Giuseppe Ragusa, 03 August 2020

Mapping the impact of central bank policy communications onto yield curve changes  is important but challenging. This column studies policy communications of the ECB and maps these communications onto yield curve changes by studying the information flow on days when a monetary policy decision is communicated. Using the now publicly available Euro Area Monetary Policy Event-Study Database,it finds that different monetary policy measures affect different segments of the interest rate term structure, with policy rate changes mostly influencing the short end of the curve, quantitative easing measures more the long end, and forward guidance policies affecting intermediate maturities. 

Rabah Arezki, 20 April 2020

COVID-19 will precipitate ‘peak demand’ for oil with dramatic consequences on oil-exporting countries in the short and medium run. This column provides a perspective on the role of monetary policy in these countries at different horizons. In the short run, (independent) monetary policy should flexibly target inflation. In the medium run, central banks need to coordinate with fiscal authorities to ensure that monetary policy operates around a credible and sustainable fiscal anchor. In the long run, central banks should beware of the existential threats posed by new risks related to stranded assets.

Lukas Hoesch, Barbara Rossi, Tatevik Sekhposyan, 07 March 2020

The information channel of monetary policy theory – whereby economic agents revise their beliefs after an unexpected monetary policy announcement not only because they learn about the current and future path of monetary policy, but also because they learn new information about the economic outlook – can potentially explain the puzzle of output increasing after a contractionary monetary policy shock. This column argues, however, that the information channel has disappeared in the US, perhaps due to the improved communication strategies implemented by the Federal Reserve.

Carlo Altavilla, Luca Brugnolini, Refet Gürkaynak, Roberto Motto, Giuseppe Ragusa, 04 October 2019

The newly released Euro Area Monetary Policy Event-Study Database makes available high-resolution data on asset price responses to ECB monetary policy announcements. In this column, the authors – the creators of the dataset – show that market perceptions of ECB policy communication comprise four factors: policy target, timing, forward guidance, and quantitative easing. These factors elicit large and long-lasting market reactions and help explain asset price changes in response to policy maker speeches and other news as well.

Carlo Altavilla, Luca Brugnolini, Refet Gürkaynak, Roberto Motto, Giuseppe Ragusa, 03 October 2019

High frequency data are an essential input to study the effects of monetary policy communication. This column introduces a new database, the Euro Area Monetary Policy Event-Study Database, which makes available intraday asset price changes around ECB policy announcements for a wide range of assets. The high resolution of the intraday data allows for the measurement of asset price changes separately for the press release and press conference windows.

Pierre Siklos, Samantha St. Amand, Joanna Wajda, 16 December 2018

There is an ongoing debate regarding how far central bankers, as unelected technocrats, should go outside of their remit when communicating in public fora. This column uses a machine-learning algorithm to assess the topics of speeches by officials at the US Federal Reserve and Bank of Canada over the last two decades. It concludes that the topics of central bankers’ speeches have not significantly widened in scope relative to their mandate documents.

Matteo Leombroni, Andrea Vedolin, Gyuri Venter, Paul Whelan, 18 October 2018

It has been argued that central bank announcements can simultaneously convey both optimism and pessimism. This column explores the issue by looking at the effects of ECB communications on euro area bond yields. It finds direct evidence that monetary policy not only affects long-term rates through expectations of future short-term rates, but also by influencing the risk premia investors need in order to hold long-term bonds. 

Thomas Lustenberger, Enzo Rossi, 04 March 2018

Most central banks communicate more openly with the markets than they did 20 years ago. The column argues that more speeches, more forward guidance, and more transparency has often worsened the accuracy of private-sector forecasts. Too much communication may be the problem, creating a cacophony of policy voices.

Neil Ericsson, 08 June 2017

Decisions by the Fed's Federal Open Market Committee are based in part on the Greenbook forecasts. These forecasts are produced by the Federal Reserve Board’s staff and are presented to the FOMC prior to their policy meetings, but are not made public for another five years. This column shows that the minutes of those FOMC meetings can help infer the Fed staff's Greenbook forecasts of the US real GDP growth rate, years before the Greenbook's public release. The FOMC minutes are thus highly informative about a key input to monetary policymaking.

Stephen Hansen, Michael McMahon, 03 February 2016

In addition to setting interest rates, central banks also communicate with the public about economic conditions and future actions. While it has been established that communication can drive expectations, less is known about how it does so. This column attempts to shed light on this question. Applying novel measures to the content of Federal Reserve statements, it shows that forward guidance is a more important driver of market variables than disclosure of information about economic conditions.

Carin van der Cruijsen, David-Jan Jansen, Jakob de Haan, 23 August 2015

Central banks have typically targeted their communication at financial markets. Increasingly, however, many have started actively communicating with the general public. Using Dutch survey data, this column finds that the public’s knowledge of monetary policy objectives is far from perfect, and varies widely across respondents. Those with a greater understanding of ECB objectives tend to form more realistic inflation expectations. Central banks seeking to target the general public must take account of discrepancies in households’ knowledge of and interest in monetary policy.

Alberto Cavallo, Guillermo Cruces, Ricardo Perez-Truglia, 10 November 2014

Although central banks have a natural desire to influence household inflation expectations, there is no consensus on how these expectations are formed or the best ways to influence them. This column presents evidence from a series of survey experiments conducted in a low-inflation context (the US) and a high-inflation context (Argentina). The authors find that dispersion in household expectations can be explained by the cost of acquiring and interpreting inflation statistics, and by the use of inaccurate memories about price changes of specific products. They also provide recommendations for central bank communication strategies. 

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