Does the Clarity of Inflation Reports Affect Volatility in Financial Markets? [electronic resource] Bulir, Ales..

Author/Creator:

Bulir, Ales.

Publication:

Washington, D.C. : International Monetary Fund, 2014.

Series:

IMF eLibrary
IMF Working Papers; Working Paper No. 14/175.
IMF Working Papers; Working Paper No. 14/175.

Format/Description:

Government document
Book
1 online resource (29 p.)

Local subjects:

Capital market volatility.
Central bank communication.
Central banks.
Central Banks and Their Policies.
Clarity.
Financial markets.
Financial Markets and the Macroeconomy.
Inflation.
Inflation reports.
Monetary Policy (Targets, Instruments, and Effects).
Public information.
Volatility.

Summary:

We study whether clarity of central bank inflation reports affects return volatility in financial markets. We measure clarity of reports by the Czech National Bank, the European Central Bank, the Bank of England, and Sveriges Riksbank using the Flesch-Kincaid grade level, a standard readability measure. We find some evidence, mainly for the euro area, of a negative relationship between clarity and market volatility prior to and during the early stage of the global financial crisis. As the crisis unfolded, there is no longer robust evidence of a negative connection. We conclude that reducing noise using clear reports is possible but not without challenges, especially in times of crisis.

Notes:

Description based on print version record.

Contributor:

Bulir, Ales.
Cihak, Martin.
Jansen, David-Jan.

Other format:

Print Version:

ISBN:

1498392911:
9781498392914

ISSN:

1018-5941

Publisher Number:

10.5089/9781498392914.001

Access Restriction:

Restricted for use by site license.

Online:

Connect to full text
http://hdl.library.upenn.edu/1017.12/1521664

Loading...