Ahmad_Su2020_Article_HowEffectiveIsCentralBankCommu.pdf (1.3 MB)
Download file

How effective is central bank communication in emerging economies? An empirical analysis of the Chinese money markets responses to the People’s Bank of China’s policy communications

Download (1.3 MB)
journal contribution
posted on 20.05.2019, 10:51 by Shiwei Su, Ahmad Hassan AhmadAhmad Hassan Ahmad, Justine WoodJustine Wood
Central banks, in both developed and developing economies, are responding to the increased demand for transparency in monetary policy formulation and implementation. It is argued that central bank communication enhances market efficiency and calms down market volatility. This paper investigates to what extent that the People Bank of China’s (PBC) communication influences the Chinese money market. Three communication indexes were constructed and used in the empirical analysis. The findings indicate that the PBC’s communication has a significant effect on the country’s money market. Secondly, informal communication appears to be more effective than formal communication. Overall, the results suggest that policy makers and market observers could pay much more attention to the informal communications, such as speeches of the bank’s officials, than formal ones, such as the bank’s report and minutes.

History

School

  • Business and Economics

Department

  • Economics

Published in

Review of Quantitative Finance and Accounting

Volume

54

Pages

1195–1219

Citation

SU, S., AHMAD, A.H. and WOOD, J.A., 2019. How effective is central bank communication in emerging economies? An empirical analysis of the Chinese money markets responses to the People’s Bank of China’s policy communications. Review of Quantitative Finance and Accounting, 54: pp.1195–1219. doi:10.1007/s11156-019-00822-7.

Publisher

Springer (© The Authors)

Version

VoR (Version of Record)

Publisher statement

This work is made available according to the conditions of the Creative Commons Attribution 4.0 International (CC BY 4.0) licence. Full details of this licence are available at: http://creativecommons.org/licenses/ by/4.0/

Acceptance date

25/04/2019

Publication date

2019-05-08

Copyright date

2020

Notes

This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.

ISSN

0924-865X

eISSN

1573-7179

Language

en