IDEAS home Printed from https://ideas.repec.org/p/zbw/bofecr/72019.html
   My bibliography  Save this paper

Mastering Central Bank Communication Challenges via Twitter

Author

Listed:
  • Korhonen, Iikka
  • Newby, Elisa

Abstract

This study examines the Twitter policies and use of European central banks. Almost every European central bank maintains an institutional Twitter account, but tweeting activity, tweet content and usage restrictions on Twitter use by individual staff members vary considerably. We further consider the evolution of Twitter use by European central banks in light of the growing importance of financial stability in central bank policy messaging. To study these issues, we create a database of tweets from European central banks and financial supervisors, as well as attempt to gauge how closely professional economists follow central banks on Twitter. Central banks’ Twitter activity has no relation to citizens’ online participation. We also find that central banks’ communication on financial stability with Twitter has increased over time, especially in comparison with monetary policy.

Suggested Citation

  • Korhonen, Iikka & Newby, Elisa, 2019. "Mastering Central Bank Communication Challenges via Twitter," BoF Economics Review 7/2019, Bank of Finland.
    • Handle: RePEc:zbw:bofecr:72019
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/213000/1/bofer-2019-07.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bholat, David & Broughton, Nida & Parker, Alice & Ter Meer, Janna & Walczak, Eryk, 2018. "Enhancing central bank communications with behavioural insights," Bank of England working papers 750, Bank of England.
    2. Alan S. Blinder, 2008. "Talking about Monetary Policy: The Virtues (and Vices?) of Central Bank Communication," Working Papers 1048, Princeton University, Department of Economics, Center for Economic Policy Studies..
    3. Saten Kumar & Hassan Afrouzi & Olivier Coibion & Yuriy Gorodnichenko, 2015. "Inflation Targeting Does Not Anchor Inflation Expectations: Evidence from Firms in New Zealand," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(2 (Fall)), pages 151-225.
    4. Alan S. Blinder & Michael Ehrmann & Marcel Fratzscher & Jakob De Haan & David-Jan Jansen, 2008. "Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 46(4), pages 910-945, December.
    5. Janet L Yellen, 2006. "Enhancing Fed Credibility," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 41(2), pages 7-13, April.
    6. David Bholat & Stephen Hans & Pedro Santos & Cheryl Schonhardt-Bailey, 2015. "Text mining for central banks," Handbooks, Centre for Central Banking Studies, Bank of England, number 33, April.
    7. Michael Woodford, 2005. "Central bank communication and policy effectiveness," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, issue Aug, pages 399-474.
    8. Benjamin Born & Michael Ehrmann & Marcel Fratzscher, 2014. "Central Bank Communication on Financial Stability," Economic Journal, Royal Economic Society, vol. 124(577), pages 701-734, June.
    9. Refet S Gürkaynak & Brian Sack & Eric Swanson, 2005. "Do Actions Speak Louder Than Words? The Response of Asset Prices to Monetary Policy Actions and Statements," International Journal of Central Banking, International Journal of Central Banking, vol. 1(1), May.
    10. Alan S. Blinder & Michael Ehrmann & Marcel Fratzscher & Jakob De Haan & David-Jan Jansen, 2008. "Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 46(4), pages 910-945, December.
    11. Binder, Carola, 2017. "Fed speak on main street: Central bank communication and household expectations," Journal of Macroeconomics, Elsevier, vol. 52(C), pages 238-251.
    12. repec:pri:cepsud:161blinder is not listed on IDEAS
    13. Andrew Haldane & Michael McMahon, 2018. "Central Bank Communications and the General Public," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 578-583, May.
    14. Adriel Jost, 2017. "Is Monetary Policy Too Complex for the Public? Evidence from the UK," Working Papers 2017-15, Swiss National Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alan S. Blinder & Michael Ehrmann & Jakob de Haan & David-Jan Jansen, 2024. "Central Bank Communication with the General Public: Promise or False Hope?," Journal of Economic Literature, American Economic Association, vol. 62(2), pages 425-457, June.
    2. Christian P Pinshi, 2022. "Ciblage des prévisions d'inflation : Un nouveau cadre pour la politique monétaire ?," Working Papers hal-03548273, HAL.
    3. Jonne Lehtimäki & Marianne Palmu, 2022. "Who Should You Listen to in a Crisis? Differences in Communication of Central Bank Policymakers," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 11(3), pages 33-57.
    4. Travis Adams & Andrea Ajello & Diego Silva & Francisco Vazquez-Grande, 2023. "More than Words: Twitter Chatter and Financial Market Sentiment," Papers 2305.16164, arXiv.org.
    5. Paloviita, Maritta & Haavio, Markus & Jalasjoki, Pirkka & Kilponen, Juha & Vänni, Ilona, 2020. "Reading between the lines : Using text analysis to estimate the loss function of the ECB," Research Discussion Papers 12/2020, Bank of Finland.
    6. Michael Ehrmann & Sarah Holton & Danielle Kedan & Gillian Phelan, 2024. "Monetary Policy Communication: Perspectives from Former Policymakers at the ECB," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 56(4), pages 837-864, June.
    7. Ehrmann, Michael & Wabitsch, Alena, 2022. "Central bank communication with non-experts – A road to nowhere?," Journal of Monetary Economics, Elsevier, vol. 127(C), pages 69-85.
    8. Donato Masciandaro & Davide Romelli & Gaia Rubera, 2021. "Monetary policy, Twitter and financial markets: evidence from social media traffic," BAFFI CAREFIN Working Papers 21160, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    9. Yuriy Gorodnichenko & Tho Pham & Oleksandr Talavera, 2021. "Central Bank Communication on Social Media: What, To Whom, and How?," Discussion Papers 21-05, Department of Economics, University of Birmingham.
    10. Paloviita, Maritta & Haavio, Markus & Jalasjoki, Pirkka & Kilponen, Juha & Vänni, Ilona, 2020. "Reading between the lines: Using text analysis to estimate the loss function of the ECB," Bank of Finland Research Discussion Papers 12/2020, Bank of Finland.
    11. Hugo Oriola & Matthieu Picault, 2023. "Opportunistic Political Central Bank Coverage: Does media coverage of ECB's Monetary Policy Impacts German Political Parties' Popularity?," EconomiX Working Papers 2023-30, University of Paris Nanterre, EconomiX.
    12. Andrea Ajello & Diego Silva & Travis Adams & Francisco Vazquez-Grande, 2023. "More than Words: Twitter Chatter and Financial Market Sentiment," Finance and Economics Discussion Series 2023-034, Board of Governors of the Federal Reserve System (U.S.).
    13. repec:zbw:bofrdp:2020_012 is not listed on IDEAS
    14. Donato Masciandaro & Davide Romelli & Gaia Rubera, 2021. "Monetary policy and financial markets: evidence from Twitter traffic," BAFFI CAREFIN Working Papers 21160, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    15. Korhonen, Iikka & Newby, Elisa & Elonen-Kulmala, Jonna, 2024. "Microblogging money: Exploring the world's central banks on Twitter," BoF Economics Review 4/2024, Bank of Finland.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Donato Masciandaro & Davide Romelli & Gaia Rubera, 2021. "Monetary policy and financial markets: evidence from Twitter traffic," BAFFI CAREFIN Working Papers 21160, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    2. McMahon, Michael & Haldane, Andrew & Macaulay, Alistair, 2020. "The 3 E’s of Central Bank Communication with the Public," CEPR Discussion Papers 14265, C.E.P.R. Discussion Papers.
    3. Haldane, Andrew & Macaulay, Alistair & McMahon, Michael, 2020. "The 3 E’s of central bank communication with the public," Bank of England working papers 847, Bank of England.
    4. Alan S. Blinder & Michael Ehrmann & Jakob de Haan & David-Jan Jansen, 2024. "Central Bank Communication with the General Public: Promise or False Hope?," Journal of Economic Literature, American Economic Association, vol. 62(2), pages 425-457, June.
    5. Glas, Alexander & Müller, Lena, 2021. "Talking in a language that everyone can understand? Transparency of speeches by the ECB Executive Board," FAU Discussion Papers in Economics 01/2021, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    6. Candia, Bernardo & Coibion, Olivier & Gorodnichenko, Yuriy, 2024. "The inflation expectations of U.S. firms: Evidence from a new survey," Journal of Monetary Economics, Elsevier, vol. 145(S).
    7. Bernardo Candia & Olivier Coibion & Yuriy Gorodnichenko, 2020. "Communication and the Beliefs of Economic Agents," NBER Working Papers 27800, National Bureau of Economic Research, Inc.
    8. R. Erasmus & H. Hollander, 2020. "A Forward Guidance Indicator For The South African Reserve Bank: Implementing A Text Analysis Algorithm," Studies in Economics and Econometrics, Taylor & Francis Journals, vol. 44(3), pages 41-72, December.
    9. Eijffinger, S.C.W. & Mahieu, R.J. & Raes, L.B.D., 2012. "Can the Fed talk the Hind Legs off the Stock Market? (replaces CentER DP 2011-072)," Discussion Paper 2012-012, Tilburg University, Center for Economic Research.
    10. Hwang, In Do & Lustenberger, Thomas & Rossi, Enzo, 2021. "Does communication influence executives’ opinion of central bank policy?☆," Journal of International Money and Finance, Elsevier, vol. 115(C).
    11. Donato Masciandaro & Davide Romelli & Gaia Rubera, 2020. "Tweeting on Monetary Policy and Market Sentiments: The Central Bank Surprise Index," BAFFI CAREFIN Working Papers 20134, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    12. Beutel, Johannes & Metiu, Norbert & Stockerl, Valentin, 2021. "Toothless tiger with claws? Financial stability communication, expectations, and risk-taking," Journal of Monetary Economics, Elsevier, vol. 120(C), pages 53-69.
    13. Möller, Rouven & Reichmann, Doron, 2021. "ECB language and stock returns – A textual analysis of ECB press conferences," The Quarterly Review of Economics and Finance, Elsevier, vol. 80(C), pages 590-604.
    14. Donato Masciandaro & Davide Romelli & Gaia Rubera, 2021. "Monetary policy, Twitter and financial markets: evidence from social media traffic," BAFFI CAREFIN Working Papers 21160, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    15. repec:zbw:bofrdp:2020_017 is not listed on IDEAS
    16. Hansen, Stephen & McMahon, Michael & Tong, Matthew, 2019. "The long-run information effect of central bank communication," Journal of Monetary Economics, Elsevier, vol. 108(C), pages 185-202.
    17. Hayo, Bernd & Neumeier, Florian, 2020. "Public knowledge about and attitudes towards central bank independence in New Zealand," Journal of Banking & Finance, Elsevier, vol. 113(C).
    18. Ehrmann, Michael & Wabitsch, Alena, 2022. "Central bank communication with non-experts – A road to nowhere?," Journal of Monetary Economics, Elsevier, vol. 127(C), pages 69-85.
    19. Coibion, Olivier & Gorodnichenko, Yuriy & Kumar, Saten & Pedemonte, Mathieu, 2020. "Inflation expectations as a policy tool?," Journal of International Economics, Elsevier, vol. 124(C).
    20. Sylvester Eijffinger & Ronald Mahieu & Louis Raes, 2017. "Can the Fed Talk the Hind Legs Off the Stock Market?," International Journal of Central Banking, International Journal of Central Banking, vol. 13(1), pages 53-94, February.
    21. Francesco D'Acunto & Daniel Hoang & Maritta Paloviita & Michael Weber, 2020. "Effective Policy Communication: Targets versus Instruments," Working Papers 2020-148, Becker Friedman Institute for Research In Economics.

    More about this item

    Keywords

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

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • 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
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:bofecr:72019. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/bofgvfi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.