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Central Bank Communication on Social Media: What, To Whom, and How?

Author

Listed:
  • Yuriy Gorodnichenko

    (University of California, Berkeley)

  • Tho Pham

    (University of York)

  • Oleksandr Talavera

    (University of Birmingham)

Abstract

This study answers three questions about central bank communication on Twitter: what was communicated, who were listeners, and how they reacted. Using various natural language processing techniques, we are able to identify seven main topics discussed by the Fed (monetary policy, economic growth, inflation, unemployment, financial risk, fiscal policy, and community) and six groups of the audience (economists, media, other academics, firm managers, financial sector, and the general public). While the Fed tweets talking about central banking topics attract greater attention from Twitter users, only the extensive margin is economically meaningful. Among all groups of users, the media accounts and economists are most active in engaging with the Fed, especially when discussing central banking related issues. Moreover, such media-Fed interactions are more likely to be noticed by other users. Further analysis shows that more positive Fed tweets are positively correlated with expected inflations during the low-interest-rate period.

Suggested Citation

  • Yuriy Gorodnichenko & Tho Pham & Oleksandr Talavera, 2021. "Central Bank Communication on Social Media: What, To Whom, and How?," Discussion Papers 21-05, Department of Economics, University of Birmingham.
    • Handle: RePEc:bir:birmec:21-05
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    References listed on IDEAS

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    Cited by:

    1. Alexopoulos, Michelle & Han, Xinfen & Kryvtsov, Oleksiy & Zhang, Xu, 2024. "More than words: Fed Chairs’ communication during congressional testimonies," Journal of Monetary Economics, Elsevier, vol. 142(C).
    2. Michael Ehrmann & Paul Hubert, 2022. "Information Acquisition ahead of Monetary Policy Announcements," Working papers 897, Banque de France.
    3. Michael J. Lamla & Dmitri V. Vinogradov, 2021. "Is the Word of a Gentleman as Good as His Tweet? Policy communications of the Bank of England," Working Paper Series in Economics 403, University of Lüneburg, Institute of Economics.

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    More about this item

    Keywords

    central bank communication; social media; public engagement; inflation expectations; natural language processing;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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