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Central bank communication and trust: an experimental study on the European Central Bank and the general public

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  • Mochhoury, Sarah

Abstract

While it has become clear that communication is a monetary policy tool for central banks, and extensive research has been conducted on central bank communication with financial markets, little is known so far on central bank communication with the general public. My research provides new insights into this field, confirming that the efforts of central banks to connect with a wider public are not in vain. In a randomised controlled trial, I focus on the determinants of trust in the European Central Bank (ECB) and on understanding of its communication about the Pandemic Emergency Purchase Programme, which was set up as part of the ECB’s response to the COVID-19 crisis. I find that the ECB’s simplified and relatable communication leads to greater trust in the central bank among the general public, as it has a positive impact on perceptions of the ECB among laypeople. The simplified content also proves to contribute to increased understanding of the central bank’s messages among the wider public. JEL Classification: C83, C93, D83, E52, E58

Suggested Citation

  • Mochhoury, Sarah, 2023. "Central bank communication and trust: an experimental study on the European Central Bank and the general public," Working Paper Series 2824, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20232824
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    Cited by:

    1. Ehrmann, Michael, 2024. "Trust in central banks," Working Paper Series 3006, European Central Bank.
    2. Eickmeier, Sandra & Petersen, Luba, 2024. "Toward a holistic approach to central bank trust," Discussion Papers 27/2024, Deutsche Bundesbank.
    3. de Haan, Jakob & Hoogduin, Lex, 2024. "ECB communication policies: An overview and comparison with the Federal Reserve," Journal of International Money and Finance, Elsevier, vol. 142(C).

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    More about this item

    Keywords

    Behavioural economics; Central bank communication; European Central Bank; Experimental economics; Trust;
    All these keywords.

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • 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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