A textual Taylor rule: estimating central bank preferences combining topic and scaling methods

Baerg, Nicole; Lowe, Will

doi:10.1017/psrm.2018.31

Cited by 31 publications

(21 citation statements)

References 45 publications

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“…Second, the study of disagreement as the difference in the expressed preferences on specific policy issues and in the salience attributed to them allows us to detect great variation in central bankers’ positions. For instance, it has been found that central bankers express much larger variation in policy positions in speech than they do in votes (Baerg and Lowe, 2020), similar to what happens in other political institutions such as legislatures, political parties and other EU institutions (Hobolt and Wratil, 2018; Proksch and Slapin, 2012; Schwarz et al., 2017). Our semantic distance measure therefore allows us to get closer to the actual disagreement expressed behind closed doors during policy meetings.…”

Section: Studying Disagreement In the Ecb Governing Councilmentioning

confidence: 83%

“…In addition to considering its intuitiveness, we relied on cosine similarity given the purposes of the analysis. Indeed, a measure of similarity based on vectors of word occurrences is the most appropriate technique when the purpose of analysis is to gauge differences in the content and attention that actors devote to specific issues rather than differences in the position of actors on a latent dimension (Benoit, 2019), such as the hawk/dove dimension that is widely used to ascertain central bankers’ preferences (see Baerg and Lowe, 2020). Another practical advantage of cosine similarity is that this measure is not affected by differences in document length.…”

Section: Methodsmentioning

confidence: 99%

“…Although a number of studies have shown that government appointments (Chappell et al., 2008; Hix et al., 2006) and interest group pressures (Jacobs and King, 2016) contribute to shaping central bankers’ heterogeneous preferences, the empirical literature on the role of domestic politics in shaping dimensionality within central banks is sparse. Instead, studies have focused on other drivers, such as the importance of regional or national economic conditions for monetary decisions (Chappel et al., 2008; Hayo and Meon, 2013; Heinemann and Huefner, 2004; Meade and Sheets, 2005), the institutional rules governing deliberations (Schonhardt-Bailey, 2013), bureaucratic incentives (Moschella and Pinto, 2019) and socialization (Ban and Patenaude, 2019; Johnson, 2016; McNamara, 1998), with the view to map central bankers’ preferences generally on a hawk-dove scale (Baerg and Lowe, 2020).…”

Section: Introductionmentioning

confidence: 99%

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Does politics drive conflict in central banks’ committees? Lifting the veil on the European Central Bank consensus

Moschella

Diodati

2019

European Union Politics

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This study investigates whether and to what extent political factors drive disagreement within the allegedly consensual monetary committee of the European Central Bank. Absent voting data, the article assesses disagreement based on the semantic distance between the policy positions publicly articulated by the European Central Bank President and the central banks of Eurozone member states. The empirical analysis shows that the disagreement articulated by national central bankers is affected by the ideological inclinations of the governments of the countries they represent. Our findings thus suggest that central bankers’ position-taking is shaped not only by economic conditions but also by domestic political considerations. This result challenges the European Central Bank’s projected image of itself as an institution whose members are impermeable to domestic political pressures as a way to defend the independence of the institution to which they belong.

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Section: Studying Disagreement In the Ecb Governing Councilmentioning

confidence: 83%

Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Does politics drive conflict in central banks’ committees? Lifting the veil on the European Central Bank consensus

Moschella

Diodati

2019

European Union Politics

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“…This paper contributes to the literature by developing a unique approach to measuring the regulatory change that can be used within other contexts outside of finance. We join a growing list of scholars who use text as a new source of data and insights into areas of international political economy as varied as bilateral investment treaties (Arel-Bundock & Lechner 2018), preferential trade agreements (Allee & Lugg 2016), and central bank preferences (Baerg & Lowe 2020).…”

Section: Discussionmentioning

confidence: 99%

Regulatory novelty after financial crises: Evidence from international banking and securities standards, 1975–2016

Pagliari

Wilf

2020

Regulation & Governance

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Financial crises are often presented as triggers for important innovations in international regulation of financial markets, but existing evidence for this claim primarily derive from the analyses of individual initiatives, assessed against noncomparable benchmarks. In order to provide systematic evidence of financial crises' impact on international financial regulatory change, this paper develops a novel text-as-data approach to measure regulatory novelty. We use this approach to analyze the full population of international banking and securities standards between 1975 and 2016. Contrary to theoretical expectations, our empirical findings indicate rules designed by international banking and securities regulators following financial crises are on average as likely to build on existing international regulations as those designed before a crisis. We also find that international banking rules published after the 2008 Global Financial Crisis are an important exception.

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“…These tools have been used to explain diverse topics such as MPs' behavior in parliament (Schonhardt-Bailey 2006;Klemmensen et al 2007;Quinn et al 2010;Proksch and Slapin 2012;Eggers and Spirling 2014), policy positions (Laver et al 2003;Slapin and Proksch 2008;Proksch and Slapin 2009), legislator press releases (Grimmer 2010), central bank statements (Baerg 2014;Baerg and Lowe 2015), news reports (Van Atteveldt et al 2008;Coscia and Rios 2012;Stockmann 2012), intra-party divisions (Ceron 2012(Ceron , 2013(Ceron , 2014Greene and Haber 2014;Lo et al 2014), social media (King et al 2013;Barbera 2015) and US government treaties with Native American tribes (Spirling 2012). Alternate approaches to scale the latent preferences of actors' have been particularly useful for some applications in comparative politics research (e.g.…”

mentioning

confidence: 99%

The Nuts and Bolts of Automated Text Analysis. Comparing Different Document Pre-Processing Techniques in Four Countries

Greene¹,

Cerón²,

Schumacher³

et al. 2016

Preprint

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Automated text analytic techniques have taken on an increasingly important role in the study of parties and political speech. Researchers have studied manifestos, speeches in parliament, and debates at party national meetings. These methods have demonstrated substantial promise for measuring latent characteristics of texts. In application, however, scaling models require a large number of decisions on the part of the researcher that likely hold substantive implications for the analysis. Past researchers proposed discussion of these implications, but there is no clear prescription or systematic examination of these choices with the goal of establishing a set of best practices based on their implications for speeches at parties' national meetings in a comparative setting. We examine the implications of these choices with data from intra-party meetings in Germany, Italy, the Netherlands, and prime minister speeches in Denmark. We conclude with considerations for those undertaking political text analyses.2 Automated text analysis methods offer substantial opportunities to develop and test political science theories. These tools have been used to explain diverse topics such as MPs' behavior in parliament (Schonhardt-Bailey 2006;Klemmensen et al. 2007;Quinn et al. 2010 Lucas et al. 2015). In using these methods, analysts face substantial choices prior to the implementation of the primary analysis. For example, researchers often reduce linguistic complexity by removing uninformative stopwords and by stemming documents, and facilitate model estimation by removing rare (or very common) terms. Although these practices are common and uncontroversial in computer science and linguistics (e.g. Hollink et al. 2004;Manning et al. 2008), the potential substantive implications of these choices for frequently used scaling models applied to political texts are less clear (see Denny and Spirling 2016 for a similar approach). Differences between languages further complicate the formulation of best practices, especially for those engaged in comparative, cross national research (but see Lucas et al. 2015).In this paper, we examine the consequences of these choices for frequently used models that estimate the latent positions of political actors from spoken and written texts (e.g. Wordfish). In particular, we review these practices and consider their implications for the estimated position of a document and the estimated uncertainty of that position. We propose that decisions related to the processing of political documents influence the consistency and the reliability of the results obtained from automated text analysis. Practices designed to 3 reduce linguistic complexity reduce the uncertainty associated with individual speeches by isolating the most informative words. We demonstrate these characteristics using party leader speeches and written texts of internal party debates in a variety of languages from Germany, Italy, and the Netherlands, and annual prime minister speeches from Denmark. We conclude that researchers sho...

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A textual Taylor rule: estimating central bank preferences combining topic and scaling methods

Cited by 31 publications

References 45 publications

Does politics drive conflict in central banks’ committees? Lifting the veil on the European Central Bank consensus

Does politics drive conflict in central banks’ committees? Lifting the veil on the European Central Bank consensus

Regulatory novelty after financial crises: Evidence from international banking and securities standards, 1975–2016

The Nuts and Bolts of Automated Text Analysis. Comparing Different Document Pre-Processing Techniques in Four Countries

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