The Information Content of Central Bank Minutes

Riksbank Research Paper Series No. 92

Sveriges Riksbank Working Paper Series No. 261

22 Pages Posted: 27 Jun 2012

See all articles by Mikael Apel

Mikael Apel

Sveriges Riksbank - Monetary Policy Department

Marianna Grimaldi

Monetary Policy Division Sveriges Riksbank

Date Written: April 1, 2012

Abstract

One characteristic feature of central banks today is that policy decisions are almost exclusively made by a committee rather than by a single policy maker. Another is that central banks are considerably more transparent than they used to be. Together, this has brought to the fore an important but so far unresolved issue: to what extent should a central bank’s communication reflect the full spectrum of opinions among its committee members? Does information on all members’ views make monetary policy easier to understand and predict, or does it make it harder? We address this issue by employing a novel method. We measure the sentiment and tone of the minutes of the Swedish central bank using an automated content analysis that converts the qualitative information in the minutes to a quantitative measure. We find that this measure is useful in predicting future policy rate decisions.

Keywords: Central Bank Communication, Minutes, Content Analysis

JEL Classification: D71, D83, E52, E58

Suggested Citation

Apel, Mikael and Grimaldi, Marianna, The Information Content of Central Bank Minutes (April 1, 2012). Riksbank Research Paper Series No. 92. Available at SSRN: https://ssrn.com/abstract=2092575 or http://dx.doi.org/10.2139/ssrn.2092575

Mikael Apel (Contact Author)

Sveriges Riksbank - Monetary Policy Department ( email )

S-103 37 Stockholm
Sweden

Marianna Grimaldi

Monetary Policy Division Sveriges Riksbank ( email )

S-103 37 Stockholm
Sweden

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