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The Role of the Media in the Inflation Expectation Formation Process

Author

Listed:
  • Tetiana Yukhymenko

    (National Bank of Ukraine)

Abstract

This research highlights the role played by the media in the formation of inflation expectations among various respondents in Ukraine. Using a large news corpus and machine-learning techniques, I have constructed newsbased metrics that produce quantitative indicators for texts, which show if the news topics are relevant to inflation expectations. I have found evidence that various news topics may have an impact on inflation expectations, and can explain part of their variance. Thus, my results could help in the analysis of inflation expectations – which is of value, given that anchoring inflation expectations remains a key challenge for central banks.

Suggested Citation

  • Tetiana Yukhymenko, 2022. "The Role of the Media in the Inflation Expectation Formation Process," Visnyk of the National Bank of Ukraine, National Bank of Ukraine, issue 253, pages 4-26.
    • Handle: RePEc:ukb:journl:y:2022:i:253:p:4-26
    DOI: 10.26531/vnbu2022.253.01
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    File URL: https://journal.bank.gov.ua/en/article/2022/253/01
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    File URL: https://libkey.io/10.26531/vnbu2022.253.01?utm_source=ideas
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    References listed on IDEAS

    as
    1. Juan Angel Garcia & Sebastian Werner, 2018. "Inflation News and Euro Area Inflation Expectations," IMF Working Papers 2018/167, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Tetiana Yukhymenko & Oleh Sorochan, 2024. "Impact of the Central Bank's Communication on Macrofinancial Outcomes," Working Papers 01/2024, National Bank of Ukraine.
    2. Tetiana Yukhymenko & Oleh Sorochan, 2024. "Impact of the central bank's communication on macro financial outcomes," IHEID Working Papers 01-2024, Economics Section, The Graduate Institute of International Studies.

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    More about this item

    Keywords

    inflation; machine learning; expectations; natural language processing; textual data;
    All these keywords.

    JEL classification:

    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • 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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