When we think of central banks, we usually picture economists crunching numbers behind closed doors. However, in today’s world, central banks like the European Central Bank (ECB) also communicate directly with the public. How effective are these messages, and who actually listens?
Dr Will Lowe, a Senior Research Scientist at the Hertie School Data Science Lab, explores this question alongside Nicole Baerg (Department of Government, University of Essex) and Dominik Duell (Department of Political Science, University of Innsbruck) in their paper “Central Bank Communication as Public Opinion?”, recently published in the Journal of Political Institutions and Political Economy. Their research sheds light on how the ECB communicates with citizens and how people in Germany respond to its messages
From policy to the public
Central banks have historically mainly spoken to investors and financial experts. However, over the past 20 years, their communication has expanded to include the general public. Yet despite their aim to inform the public, public understanding of central banking remains limited. Findings by Lowe and his colleagues show that even slight differences in how the ECB communicates – such as clarity and brevity – influence how people form expectations about inflation. Alongside this, their study also indicates that the reception of central bank communication varies across different social groups.
The role of trust and support
One of the study’s key findings is that communication effectiveness depends on public trust. Citizens who already support the ECB and the European project are much more receptive to central bank messages. People with more sceptical opinions about the ECB and the EU, on the other hand, are less receptive to the same information. In other words, monetary policy is not just about economics but is also deeply political.
Simplicity matters
The research findings also show that the stylistic features of communication matter; the ECB’s messages are most effective when they are concise, clear and repeated. Complex or lengthy statements tend to be ignored, especially by those sceptical of the ECB. For central banks, this insight underscores the importance of treating communication as a strategic tool, rather than just a formality.
Implications for Europe and beyond
This research is particularly relevant in Germany. Declining trust in the ECB in Germany can make inflation management more challenging, creating a feedback loop where public scepticism undermines monetary policy. Lowe’s findings highlight that effective communication is not only about transmitting information; it’s also about maintaining legitimacy.
A broader lesson
The research findings remind us that public opinion, politics and economics are tightly intertwined. The way that central banks communicate is essential, but citizens’ political attitudes in turn shape how they interpret these messages. For policymakers, the takeaway is clear: clarity, brevity and trust are just as important as the numbers themselves.
Read the paper here.
Contact us
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William Lowe, Senior Research Scientist
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Aliya Boranbayeva, Associate Communications and Events | Data Science Lab
