Text sources

All the monetary policy accounts since 2015 were retrieved from European Central Bank’s homepage.

Dovish-Hawkish Score

A hawkish central bank generally favours relatively higher interest rates if needed to keep inflation in check. Conversely, a dovish central bank is more likely to engage in stimulative monetary policy.

To measure the hawkish or dovish sentiment of ECB monetary policy accounts, the following procedure was used:

First, a set of keywords that pertain to inflation and other indicators of economic outlook was compiled.

Second, keywords are categorized as hawkish or dovish using two lists of positive (e.g., expand, increase, strong), and negative terms (e.g., decrease, decline, weak):

• Keywords are classified as hawkish if they depict hawkish sentiments when associated with positive terms and dovish sentiments when connected to negative terms.

• Keywords are classified as dovish if they portray dovish sentiments when connected to positive terms and hawkish sentiments when associated with negative terms.

Third, each sentence is given a score hawkish (1), dovish (-1), neutral (0) according to the relative number of hawkish or dovish keywords defined before.

Finally, each document is classified according to the presence of hawkish sentences (H) vs. dovish sentences (D), based on the following formula: (H-D)/(H+D), whose value is in the range between -1 (extreme dovish sentiment) and 1 (extreme hawkish sentiment).