THE SPEECHES OF THE EUROPEAN CENTRAL BANK’s PRESIDENTS: AN NLP STUDY

Abstract

This paper introduces natural language processing into the study of central banking. It studies the evolution of the ECB’s communication through time, considering its three subsequent presidents (W. Duisenberg, J. C. Trichet and M. Draghi) and the pre- and post-2008 financial crisis era. It helps understand the history of the ECB since its inception. From a methodological standpoint, we study the evolution of the ECB’s speeches. The speech analysis is based on text classification and sentiment/polarity analyses. For that purpose, we have built a unique dataset of the ECB’s speeches. We have coded algorithms to run the text analysis through time. They help us capture the evolution in the ECB’s understanding of the actual economic situation and also measure — for instance — the stress level at the ECB through a polarity analysis through time.