The clarity of monetary policy communication and financial market volatility in developing economies

IF 5.6 2区经济学 Q1 BUSINESS, FINANCE

Emerging Markets Review Pub Date : 2024-03-01 DOI:10.1016/j.ememar.2024.101121

Iegor Vyshnevskyi , Wytone Jombo , Wook Sohn

引用次数: 0

Abstract

This study investigates the effect of the clarity of monetary policy statements (MPSs) on financial market volatilities by employing linguistic analysis and a panel fixed effects estimator for a newly built dataset drawn from the MPSs of 21 developing countries. Our results show that MPS clarity, measured by complexity and readability indices, negatively affects foreign exchange rate volatility, a key policy variable in developing economies, suggesting that clear central bank communication can reduce financial market volatility. Given the low literacy levels in developing countries, their central banks should make an extra effort to write statements that are easy to comprehend.

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发展中经济体货币政策沟通的清晰度与金融市场的波动性

本研究采用语言分析法和面板固定效应估计法，从 21 个发展中国家的货币政策声明中新建立的数据集出发，研究了货币政策声明的清晰度对金融市场波动性的影响。我们的研究结果表明，以复杂性和可读性指数衡量的 MPS 清晰度对外汇汇率波动（发展中经济体的一个关键政策变量）有负面影响，这表明清晰的中央银行沟通可以降低金融市场的波动性。鉴于发展中国家的文化水平较低，这些国家的中央银行应更加努力撰写易于理解的声明。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Emerging Markets Review Multiple-

CiteScore

7.10

自引率

4.20%

发文量

审稿时长

100 days

期刊介绍： The intent of the editors is to consolidate Emerging Markets Review as the premier vehicle for publishing high impact empirical and theoretical studies in emerging markets finance. Preference will be given to comparative studies that take global and regional perspectives, detailed single country studies that address critical policy issues and have significant global and regional implications, and papers that address the interactions of national and international financial architecture. We especially welcome papers that take institutional as well as financial perspectives.