RBA's Communication Strategy Under the Microscope

The Reserve Bank of Australia (RBA) has emphasized improving its communication strategy in the 2023 Review. To better understand this goal, a team at MacroBusiness employed natural language processing (NLP) methodologies to analyze the RBA's policy statements.

Using dictionary-based parsing, an encoder-only language model, and a Large Language Model (LLM), they created hawkish-dovish tone indices. This analysis aimed to provide a more nuanced understanding of the RBA's communication approach.