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What Drives Clarity of Central Bank Communication About Inflation?

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Listed:
  • Aleš Bulíř
  • Martin Čihák
  • David-Jan Jansen

Abstract

This paper examines whether the clarity of central bank communication about inflation varies with the economic environment. Using readability statistics and content analysis, we study the clarity of communication on the inflation outlook by seven central banks across three continents during the recent decade. We uncover significant and persistent differences in clarity over time and across countries. However, identifying determinants of clarity that are robustly relevant across our sample of central banks proves elusive. Overall, our findings suggest that a single model for clarity of central bank communication is not appropriate. Rather, when studying clarity of communication, country-specific and institution-specific factors are highly relevant. Copyright Springer Science+Business Media New York (outside the USA) 2013

Suggested Citation

  • Aleš Bulíř & Martin Čihák & David-Jan Jansen, 2013. "What Drives Clarity of Central Bank Communication About Inflation?," Open Economies Review, Springer, vol. 24(1), pages 125-145, February.
    • Handle: RePEc:kap:openec:v:24:y:2013:i:1:p:125-145
    DOI: 10.1007/s11079-012-9259-z
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    More about this item

    Keywords

    Monetary policy; Communication; Inflation; Clarity; Transparency; E52; E58;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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