DP16525 Central Bank Communication with Non-Experts - A Road to Nowhere?
|Author(s):||Michael Ehrmann, Alena Wabitsch|
|Publication Date:||September 2021|
|Date Revised:||September 2021|
|Keyword(s):||central bank communication, monetary policy, non-experts, social media|
|Programme Areas:||Monetary Economics and Fluctuations|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=16525|
Central banks have intensified their communication with non-experts â?? an endeavour which some have argued is bound to fail. This paper studies English and German Twitter traffic about the ECB to understand whether its communication is received by non-experts and how it affects their views. It shows that Twitter traffic is responsive to ECB communication, also for non-experts. For several ECB communication events, Twitter constitutes primarily a channel to relay information: tweets become more factual and the views expressed more moderate and homogeneous. Other communication events, such as former President Draghi's "Whatever it takes" statement, trigger persistent traffic and a divergence in views. Also, ECB-related tweets are more likely to get retweeted or liked if they express stronger or more subjective views. Thus, Twitter also serves as a platform for controversial discussions. The findings suggest that central banks manage to reach non-experts, i.e. their communication is not a road to nowhere.