Monetary Policy in the Media

By Helge Berger, Michael Ehrmann, Marcel Fratzscher. Social Science Research Network, 2006

119 citations recorded by the source corpus.

Just like private companies depend crucially on their ability to reach customers, policymakers must communicate with private agents to be successful--and much of this communication is channeled through the media. This is especially true for central banks because the effectiveness of monetary policy depends to a large degree on their credibility among the general public. Using the case of the European Central Bank (ECB), the paper analyses the favorableness with which monetary policy decisions are reported upon in the print media. We find that media coverage is, among other things, influenced by the amount of information communicated by the ECB. There are, however, also indications of a critical monitoring role assumed by the media, which tends to report more negatively on ECB policy decisions when inflation exceeds the inflation target.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/e2e8b909d380f08f606107c35c6f6449e4dcf4bc

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. Marcel Fratzscher
2. Michael Ehrmann
3. Jakob de Haan
4. Heikki Lehkonen
5. D. Jansen
6. J. Rogers
7. Kristin J. Forbes
8. Arnaud Mehl

In Sociology and Political Science

1. Michael Ehrmann
2. Marcel Fratzscher

Citations in the corpus

• The Voice of Monetary Policy (2021, unknown): “Relatedly, given the negative media bias in covering monetary policy (Berger et al., 2011), the financial market responses may be driven by negative news, which may also correlate with the policy cycle (e.g., raising interest rates may be interpreted as bad news for the economy).”
• Explaining Monetary Policy in Press Conferences (2018, background): “Examples of studies on the Federal Reserve are Thornton (1998), Fleming and Remolona (1999), Kuttner (2001), Cochrane and Piazzesi (2002), Bomfim (2003), Ehrmann and Fratzscher (2004), Rigobon and Sack (2004), and Bernanke and Kuttner (2005). Studies covering the ECB are Gaspar, Perez-Quiros, and Si”
• Interest Rate Expectations in the Media and Central Bank Communication (2013, unknown): “Berger et al. (2011b) is a welcome exception.”
• Shocking language: understanding the macroeconomic effects of central bank communication (2016, unknown): “For example, Ehrmann and Fratzscher (2007) examine the communication strategies of the ECB, Bank of England and the Federal Reserve; Ranaldo and Rossi (2010) examine the financial market effects of Swiss National Bank announcements; Hayo and Neuenkirch (2010) consider the predictability of future Fe”