Translartion. Region: Russians Fedetion –
Source: Central Bank of Russia –
Published first in 2025 number quarterly scientific journal of the Bank of Russia “Money and Credit”. Among the topics of the issue are modeling trust in the central bank based on social media data, forecasting inflation using news texts and analysis of factors influencing inflation risks.
Trust in the central bank is one of the factors of the effectiveness of monetary policy (MP): the higher the level of trust in the central bank, the stronger its influence on inflation expectations. To assess the level of trust, survey data are usually used, which are problematic to conduct too often. Anastasia Matevosova (Moscow State University; Institute of Economics of the Russian Academy of Sciences) offers use big data and builds an indicator based on sentiment analysis of VKontakte user comment texts. Such an indicator can be used with different frequencies – for example, on both weekly and annual data. Modeling on weekly data revealed that an increase in trust leads to a decrease in inflation expectations with a lag of about 2 weeks.
Text analysis using neural networks can also help in forecasting inflation. Elizaveta Volgina (Moscow State University) in her work uses To do this, information from the media news is added to standard macro variables (such as the dynamics of wages, industrial production or oil prices). The author shows that such a forecast is more accurate than a forecast without taking into account the news.
When conducting monetary policy, it is important for central banks to take into account not only the inflation forecast, but also the risks that it will be higher. With the same forecast, a situation in which the risk of high inflation is more significant requires stricter monetary policy measures. Alexandra Chudayeva (RANEPA) analyzes the factors of such inflation risks andshows, that on a yearly horizon these include an increase in wages and a decline in production, and on a monthly horizon – an increase in retail turnover and a weakening of the ruble.
You can read these and other articles from the magazine “Money and Credit” No. 1 for 2025 atwebsite magazine.
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