Abstract:

Central bank communication， as a crucial tool for managing monetary policy expectations， aims to convey information to the public， thereby influencing their economic behavior. The communication of the central bank in shaping inflation expectations is of significant importance for enhancing the effectiveness of monetary policy and ensuring the stable development of the macroeconomy. The Latent Dirichlet Allocation （LDA） model and the Gate Recurrent Unit （GRU） model are employed to quantitatively measure the communication index of China's central bank and inflation expectations. Furthermore， using the TVP-SV-VAR model， empirical analysis is conducted to examine the effectiveness of central bank communication in managing inflation expectations. It is revealed that the central bank's release of positive and prudent signals helps guide the public in forming rational inflation expectations， but attention should be paid to the self-reinforcement of these expectations. Additionally， the central bank should adjust its communication content promptly based on inflation conditions. Therefore， precise communication language can increase forward guidance and is crucial for enhancing the effectiveness of central bank communication management in China. While implementing central bank communication as a novel monetary policy tool should be combined with traditional monetary policy tools， providing a reference for the future inclusion of central bank communication in the toolbox of monetary policy regulation.

Key words: central bank communication, inflation expectation, GRU, TVP-SV-VAR