Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/217672 
Year of Publication: 
2019
Citation: 
[Journal:] Journal of Central Banking Theory and Practice [ISSN:] 2336-9205 [Volume:] 8 [Issue:] 2 [Publisher:] De Gruyter Open [Place:] Warsaw [Year:] 2019 [Pages:] 5-32
Publisher: 
De Gruyter Open, Warsaw
Abstract: 
Modern central banks increasingly value monetary policy transparency, and attempt to build credibility by communicating their decisions to the public. This paper studies whether the communication of central banks can be used to explain upcoming changes in their most important monetary policy instrument, the short-term refinancing rate, and whether the public can trust central bank communication during times of financial crisis. This is done by constructing an indicator to measure the predictability of monetary policy by calculating the median of the policy makers’ official comments. The performance of this indicator is studied with ordered probit methods. The results show that predictability was reached relatively well at central bank level during the financial crisis despite the rapid growth of economic uncertainty, and that communication can be a useful tool for central banks during uncertain times.
Subjects: 
Monetary Policy
Central banking
Communication
Central Banks and Their Policies.
JEL: 
D83
E50
E52
E58
E59
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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