Report on „Central Bank Mandates: Their Influence on the Content and Tone of Communication” Research SeminarPierre Siklos, professor of Macroeconomics at the Department of Economics, Wilfrid Laurier University, Balsillie School of International Affairs, and researcher at the Centre for Applied Macroeconomic Analysis (CAMA) visited the Institute of Economics on 2nd March, 2022.
At the lunchtime seminar for a packed room of colleagues, he introduced us to one of his recent research projects about monetary policy communication. The research project involved Martin T. Bohl and Dimitrios Kanelis from the Department of Economics at the Westfälische Wilhelms-Universität Münster.
In their paper, the authors analyze the evolution and short-term sentiment dynamics of speeches by members of the FED Board of Governors and members of the Executive Board of the ECB regarding inflation, employment, and unemployment. Using Structural Topic Modelling, we find that employment topics have become less relevant to ECB Executive Board members over time, especially since the international financial crisis of 2007-9. The Eurozone sovereign debt crisis has not produced a course correction. In contrast, Fed governors discuss employment more from a business cycle stabilization perspective than a structural view of the issues. We also find that both current and expected inflation drives the short-term sentiment dynamics of speeches by ECB Executive Board members. Taylor rule-like factors do not appear to explain the tone of speeches by members of the FED Board of Governors. Generally, both central banks have ‘talked’ more alike than might be expected given their different statutory mandates.
Pierre’s short bio.
“Pierre Siklos received his Ph.D. in 1981. He specializes in macroeconomics with an emphasis on the study of inflation, central banks, and financial markets. His research has been published in a variety of institutions and central banks. He has also been a visiting lecturer at several universities around Europe and North America, Australia, and New Zealand. His research has been funded by domestic and international agencies. In 1999, he was Erskine Fellow at the University of Canterbury, New Zealand, and in 2009, was William Evans Fellow at the University of Otago, Dunedin, New Zealand. In 2008 he was Chairholder of the Bundesbank Foundation of International Monetary Economics at the Freie Universität, Berlin. Since 2008, he has been a member of the C.D. Howe Institute’s Monetary Policy Council, where he has been a Research Fellow since Aug. 2010. He is also a Senior Fellow at the Centre for International Governance Innovation (CIGI).
In 2015, he was a Visiting Research Fellow at the Bank for International Settlements; a National Fellow at the Hoover Institution, Stanford University; a Visiting Fellow at the University of Tasmania; and a visiting researcher at the Bank of Japan. He was WLU’s University Research Professor for the academic year 2000-2001 and was Director of the Viessmann European Research Centre from 2005-2014.”
The lecture was attended by many members of the Institute of Economics and some colleagues from other institutes of the university. A few even joined the session online. Before and after the lecture Pierre provided office hours to colleagues of the institute and a Ph.D. student, needless to say, all of them did benefit a lot from his research experience and guidance.
Thanks to the Research Management Office for the support without which this event could not have been organized.