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A textual analysis of central bank communication the case of Indonesia

Author

Listed:
  • Haryo Kuncoro

    (Faculty of Economics, State University of Jakarta)

  • Gatot Nazir Ahmad

    (Faculty of Economics, State University of Jakarta)

  • Dianta Sebayang

    (Faculty of Economics, State University of Jakarta)

Abstract

The objective of this paper is two-fold: (1) to assess the textual aspects of the Central Bank of Indonesia's monetary policy communication and (2) identify their potential relation to the inflation expectations. Using monthly policy interest rate press release announcements, we found that the text readability is relatively stable, although the text complexity is higher. However, the clarity and readability of the text are negatively correlated with the inflation expectations. Meanwhile, the tone of the text is positively associated with the inflation expectations. They suggest that the central bank should strengthen the quality of the text announced and pay more attention to the informal communication channels. The high quality and use of informal communication channels provide additional pieces of information in shaping price expectations in the future.

Suggested Citation

  • Haryo Kuncoro & Gatot Nazir Ahmad & Dianta Sebayang, 2021. "A textual analysis of central bank communication the case of Indonesia," Economics Bulletin, AccessEcon, vol. 41(3), pages 2158-2172.
    • Handle: RePEc:ebl:ecbull:eb-21-00001
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    References listed on IDEAS

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    Cited by:

    1. Haryo Kuncoro, 2024. "Inflation and Its Uncertainty: Evidence from Indonesia and the Philippines," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 16(2), pages 231-247, May.

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    More about this item

    Keywords

    Central Bank Communication; Text Mining; Monetary Policy; Inflation Expectations;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

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