Monetary Policy in the Media

Just like private companies depend crucially on their ability to reach customers, policymakers must communicate with private agents to be successful—and much of this communication is channeled through the media. This is especially true for central banks, which need to build credibility among the general public. This paper analyses how favorably the print media report about the European Central Bank's (ECB) monetary policy decisions. Favorableness is, inter alia, influenced by the amount of information communicated by the ECB. There are, however, also indications of a critical monitoring role of the media, which reports more negatively when inflation exceeds the inflation target.