Clarity of Central Bank Communication About Inflation
26 Pages Posted: 2 Jun 2015
Date Written: January 2012
This paper examines whether the clarity of central bank communication about inflation has changed with the economic environment. We use readability statistics and content analysis to study the clarity of communication on the inflation outlook by seven central banks between 1997 and 2010. Overall, we find no strong indications that central banks were less clear in explaining their policies when faced with higher uncertainty or a less favorable inflation outlook. The global financial crisis, however, did have a negative impact on clarity of central bank communication.
Keywords: inflation, central bank, monetary policy, inflation target, national bank, monetary fund, financial stability, inflation targeting, price stability, inflation forecasts, aggregate demand, monetary policy decisions, high inflation, inflation targeting regime, percent inflation
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