Bank of Israel - Press Releases - Measuring Communication Quality in the Bank of Israel's Interest Rate Announcements
Central bank: boi | Type: statement | Date: 2019-10-24

This box makes use of text-mining
tools to measure the quality of the Bank of Israel's communications with the
public. It focuses on the Bank's interest rate announcements in English that
were published between 2007 and 2018. We examine the text's accessibility to
its readers, meaning how easy the text is to read. We also conduct a sentiment
analysis to examine the message that the announcements try to communicate and
their economic content. As expected, the analysis shows that the Bank of
Israel's announcements are understandable mainly to readers with post-secondary
education, but that even so, they are more accessible than the announcements by
the Federal Reserve and the European Central Bank. The analysis further shows
that the sentiment reflected in the text of the announcements is consistent
with certain characteristics of the economy. In particular, we provide
preliminary evidence of a correlation between the uncertainty reflected in the
text and the VIX index of volatility in the domestic markets.