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Narrative Practices in Central Bank Communication

A fundamental and effective way of human communication is narratives. It is believed that narratives help central banks communicate with their stakeholders easily. Central banks have started to make use of narratives in their communications for accountability concerns and policy decision announcements. Central banks should make use of narratives to meet the public's and the markets' expectations. To improve the quality and effectiveness of central banks' communications, a focused and coherent narrative would be an important asset to help make the ambiguous and technical nature of macroprudential policy more precise and meaningful. This paper aims to show that to what extent narratives have been being used in communication activities by central banks. In this scope, a literature review will be made to identify narrative uses by central banks and a connection will be tried to be established between narratives and central bank communication to show how significant roles narratives can play in central bank communication.