scholarly journals The Reception of Public Signals in Financial Markets: What if Central Bank Communication Becomes Stale?

2009 ◽  
Author(s):  
Michael Ehrmann ◽  
David Sondermann
Keyword(s):  
Central Bank ◽  
Financial Markets ◽  
Central Bank Communication ◽  
Public Signals

scholarly journals Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence

2008 ◽  
Vol 46 (4) ◽  
pp. 910-945 ◽  
Author(s):  
Alan S Blinder ◽  
Michael Ehrmann ◽  
Marcel Fratzscher ◽  
Jakob De Haan ◽  
David-Jan Jansen
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Financial Markets ◽  
Real World ◽  
Communication Strategies ◽  
Central Banks ◽  
Communication Strategy ◽  
Scholarly Literature ◽  
Central Bank Communication ◽  
Almost All

Over the last two decades, communication has become an increasingly important aspect of monetary policy. These real-world developments have spawned a huge new scholarly literature on central bank communication—mostly empirical, and almost all of it written in this decade. We survey this ever-growing literature. The evidence suggests that communication can be an important and powerful part of the central bank's toolkit since it has the ability to move financial markets, to enhance the predictability of monetary policy decisions, and potentially to help achieve central banks' macroeconomic objectives. However, the large variation in communication strategies across central banks suggests that a consensus has yet to emerge on what constitutes an optimal communication strategy.

scholarly journals Mexico’s Monetary Policy Communication and Money Markets

2019 ◽  
Vol 11 (2) ◽  
pp. 81
Author(s):  
Alicia Garcia-Herrero ◽  
Eric Girardin ◽  
Arnoldo Lopez-Marmolejo
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Financial Markets ◽  
Strong Evidence ◽  
Money Market ◽  
Significant Rise ◽  
Money Markets ◽  
Governing Body ◽  
Central Bank Communication ◽  
Policy Communication

Central bank communication is becoming a key aspect of monetary policy. How much financial markets listen and, possibly, understand Banco de Mexico’s communication on its monetary policy stance should be a key consideration for the central bank to further modernize its monetary policy toolkit. In this paper, we tackle this issue empirically by using our own index of the tone of communication based on Banco de Mexico’s speeches and statements and find that Mexican money markets do not only listen but they also understand the stance of monetary policy conveyed in the central bank’s words. Regarding the ability to listen we find that both the volatility and volume in the money market rates change right after communication from Banco de Mexico’s governing body. As for the markets’ understanding, we document a statistically significant rise in money market rates the more hawkish communication is. All in all, our results show strong evidence of effective oral and written communication from the Central Bank towards Mexico’s money markets.

Clarity of Central Bank Communication About Inflation

2011 ◽  
Author(s):  
Ales Bulir ◽  
Martin Cihák ◽  
David-Jan Jansen
Keyword(s):  
Central Bank ◽  
Central Bank Communication
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