Talk is not cheap: Policy agendas, information processing, and the unusually proportional nature of European Central Bank communications policy responses

This article unveils the policy agenda of the European Central Bank (ECB) Governing Council as found in the speeches that Governing Council Members gave between 1999 and 2018. Using a dynamic topic‐modeling approached based on non‐negative matrix factorization, we demonstrate how the issues discussed by ECB Governing Council members have evolved over time, and how the general punctuation hypothesis (Jones, B. D. & Baumgartner, F. R. (2005). The politics of attention: How government prioritizes problems. University of Chicago Press) sheds light on what drives this process. We find that unlike policy outputs from many other policymaking systems, ECB communications evolve in a proportional manner. We attribute this finding to the information‐processing capacities of the bank. Our findings speak to the literatures on central bank communications, the evolution of policy agendas, and the application of topic models to speech texts.