Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278341 
Year of Publication: 
2023
Series/Report no.: 
ECB Working Paper No. 2770
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
How do financial markets acquire information about upcoming monetary policy decisions, beyond their reaction to central bank signals? This paper hypothesises that sharing information among investors can improve expectations, especially in the presence of disagreement or uncertainty about the economy. To test this hypothesis, the paper studies monetary policy-related content on Twitter during the "quiet period" before European Central Bank announcements, when policymakers refrain from public statements related to monetary policy. Conditional on large disagreement about the economic outlook, higher Twitter traffic is associated with smaller monetary policy surprises, suggesting that exchanging private signals among investors can help improve expectations.
Subjects: 
Central bank communication
quiet period
Twitter
market expectations
information processing
JEL: 
D83
E52
E58
G14
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-5512-6
Document Type: 
Working Paper

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