||Strategic Central Bank Communication : Discourse and Game-Theoretic Analyses of the Bank of Japan’s Monthly Report
Kawamura, Kohei ,
Kobashi, Yohei ,
Shizume, MasatoUeda, Kozo
JSPS Grants-in-Aid for Scientific Research (S) Understanding Persistent Deflation in Japan Working Paper Series
0802016-03 , UTokyo Price Project , University of Edinburgh , Waseda University , Centre for Applied Macroeconomic Analysis (CAMA)
2012～2016年度科学研究費補助金[基盤研究(S)]「長期デフレの解明」(研究代表者 東京大学経済学研究科・渡辺努, 課題番号：24223003)
We conduct a discourse analysis of the Bank of Japan's Monthly Report and examine its characteristics in relation to business cycles. We find that the difference between the number of positive and negative expressions in the reports leads the leading index of the economy by approximately three months, which suggests that the central bank's reports have some superior information about the state of the economy. Moreover, ambiguous expressions tend to appear more frequently with negative expressions. Using a simple persuasion game, we argue that the use of ambiguity in communication by the central bank can be seen as strategic information revelation when the central bank has an incentive to bias the reports (and hence beliefs in the market) upwards.