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Measuring Communication Quality of Interest Rate Announcements

Author

Listed:
  • Jonathan Benchimol

    (BoI - Bank of Israel)

  • Itamar Caspi

    (BoI - Bank of Israel)

  • Sophia Kazinnik

    (Federal Reserve Bank of Richmond)

Abstract

We use text-mining techniques to measure the accessibility and quality of information within the texts of interest rate announcements published by the Bank of Israel over the past decade. We find that comprehension of interest rate announcements published by the Bank of Israel requires fewer years of education than interest rate announcements published by the Federal Reserve and the European Central Bank. In addition, we show that the sentiment within these announcements is aligned with economic fluctuations. We also find that textual uncertainty is correlated with the volatility of the domestic financial market.

Suggested Citation

  • Jonathan Benchimol & Itamar Caspi & Sophia Kazinnik, 2023. "Measuring Communication Quality of Interest Rate Announcements," Post-Print emse-04624983, HAL.
    • Handle: RePEc:hal:journl:emse-04624983
    DOI: 10.1515/ev-2022-0023
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    Cited by:

    1. Vyshnevskyi, Iegor & Jombo, Wytone & Sohn, Wook, 2024. "The clarity of monetary policy communication and financial market volatility in developing economies," Emerging Markets Review, Elsevier, vol. 59(C).
    2. Curti, Filippo & Kazinnik, Sophia, 2023. "Central bank communication and website characteristics," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 1216-1241.

    More about this item

    Keywords

    text mining; central bank communication; monetary policy; financial stability;
    All these keywords.

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • 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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