ECB study finds messenger nationality impacts policy communication
A new European Central Bank study reveals that the messenger's nationality significantly influences the reach and persuasiveness of monetary policy communication. Shared national identity increases news coverage and public belief in central bank messages.
Shared nationality boosts message visibility
When central bankers share a national identity with their audience, their messages attract more local attention.
This leads to increased exposure for people sharing the messenger's nationality compared to other euro area audiences.
The study, based on eight million ECB-related tweets and over 25,000 newspaper articles from 2016 to 2022 in Germany, Spain, France, and Italy, confirms this pattern.
For instance, Italian newspapers extensively covered the ECB during President Mario Draghi's tenure, with coverage dropping after French President Christine Lagarde took office in 2019.
Conversely, news coverage in France increased significantly under President Lagarde.
This demonstrates how the choice of messenger enhances message visibility for specific national audiences.
Ingroup effect enhances message persuasiveness
Shared identity enhances message persuasiveness through the 'ingroup effect,' where similar messengers have a stronger impact on public beliefs.
Analyzing economic sentiment in tweets after 48 ECB press conferences, the study found stronger reactions from social media users when the President shared their nationality, indicating higher information acceptance.
A controlled experiment confirmed that individuals adjusted inflation expectations more when the messenger shared their nationality, even for ECB-affiliated communicators.
This preference for ingroup messengers is driven by increased trust and perceived ability.
Beyond words: Identity shapes policy impact
This research offers crucial insights into the human element of central bank communication.
It highlights that effective policy transmission is deeply influenced by the messenger's perceived identity, not just the content.
Strategically leveraging diverse communicators could significantly enhance public engagement and policy effectiveness.