NO : WP-2023-03
AUTHOR : Rounak Sil, Unninarayanan Kurup, Ashima Goyal, Apoorva Singh, Rajendra
TITLE : Chorus in the Cacophony: Dissent and Policy Communication of India’s Monetary Policy Committee
Using minutes of consecutive Monetary Policy Committee (MPC) meetings of
the Indian central bank, we have constructed two novel measures of implicit
dissent at the individual level as well as across groups. We have used VADER
sentiment analysis to arrive at the proposed measures and investigated their
influence on anchoring Indian growth and inflation forecasts. Our empirical
findings show discordance amongst members increases forecast accuracy.
This implies promoting an environment that supports nuanced opinions could
improve policy outcomes.
Keywords: Monetary policy, Dissent, NLP, Supply shock, Linear Regression Model
JEL Code: E52, E58, C22