Central Bank Communication by ??? The Economics of Public Policy Leaks

52 Pages Posted: 5 Jun 2023 Last revised: 29 Aug 2023

See all articles by Michael Ehrmann

Michael Ehrmann

European Central Bank (ECB); Centre for Economic Policy Research (CEPR)

Phillipp Gnan

Vienna University of Economics and Business

Kilian Rieder

Oesterreichische Nationalbank (Eurosystem)

Date Written: August 26, 2023

Abstract

Leaks of confidential information emanating from public institutions have been the focus of a long-standing line of research. Yet, their determinants as well as their potential impact on public views and on policy effectiveness remain elusive. To address this gap, we study leaks from central banks because their effects are instantaneously reflected in financial markets. Based on a novel database of anonymous monetary policy leaks in the euro area as reported by newswires, we provide evidence that many of these leaks are likely placed by individual insiders with minority opinions. While we find that leaks have large effects on markets and weaken official policy announcements, our results also suggest that leaks do not lock in decision-makers, and that attributed communication can mitigate some of their effects.

Keywords: leaks, media, confidential information, central bank communication, monetary policy, European Central Bank

JEL Classification: D83, E52, E58, G14, H83

Suggested Citation

Ehrmann, Michael and Gnan, Phillipp and Rieder, Kilian, Central Bank Communication by ??? The Economics of Public Policy Leaks (August 26, 2023). Available at SSRN: https://ssrn.com/abstract=4453039 or http://dx.doi.org/10.2139/ssrn.4453039

Michael Ehrmann

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Phillipp Gnan (Contact Author)

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

Kilian Rieder

Oesterreichische Nationalbank (Eurosystem) ( email )

Otto-Wagner-Platz 3, PO Box 61
Vienna,
1010 Vienna, A-1011
Austria

HOME PAGE: http://kilianrieder.com/

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