The Global Financial Crisis and the Language of Central Banking: Central Bank Guidance in Good Times and in Bad

CAMA Working Paper Series Paper 58/2013

41 Pages Posted: 29 Aug 2013

See all articles by Pierre L. Siklos

Pierre L. Siklos

Wilfrid Laurier University - School of Business & Economics; Balsillie school of international affairs

Date Written: August 2013

Abstract

Words are critical in how the public perceives the work of central banks and the quality of monetary policy. Press releases that accompany policy rate decisions and, where available, the minutes of central bank committee meetings, are focal points for the media in public discussions about the conduct of monetary policy.

Using data from five countries, I examine whether the language used by central banks has changed since the global financial crisis (GFC) began.

Briefly, I find that concerns about financial stability peaked just as the global financial crisis reached its zenith. However, concerns over uncertainty about the current and anticipated state of the economy have also risen over time. More generally, central bank speak became more aggressive throughout the crisis years. More conventional expressions about the current stance of monetary policy took a back seat to other concerns in central bank policy statements and minutes.

Keywords: central bank communication, financial stability, language analysis

JEL Classification: E52, E58, E61, E69

Suggested Citation

Siklos, Pierre L., The Global Financial Crisis and the Language of Central Banking: Central Bank Guidance in Good Times and in Bad (August 2013). CAMA Working Paper Series Paper 58/2013, Available at SSRN: https://ssrn.com/abstract=2317062 or http://dx.doi.org/10.2139/ssrn.2317062

Pierre L. Siklos (Contact Author)

Wilfrid Laurier University - School of Business & Economics ( email )

Department of Economics
75 University Avenue W.
Waterloo, Ontario N2L 3C5
Canada
519-884-0710 Ext.. 3491 (Phone)

HOME PAGE: http://pierrelsiklos.com

Balsillie school of international affairs ( email )

67 Erb Street West
Waterloo, ON N2L 6C2
Canada

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