Chorus in the Cacophony: Dissent and Policy Communication of India’s Monetary Policy Committee

Abstract

ABSTRACT Using minutes of consecutive Monetary Policy Committee (MPC) meetings of the Indian central bank, we have constructed two novel measures of implicit dissent at the individual level as well as across groups. We have used VADER sentiment analysis to arrive at the proposed measures and investigated their influence on anchoring Indian growth and inflation forecasts. Our empirical findings show discordance among members increases forecast accuracy. This implies promoting an environment that supports nuanced opinions could improve policy outcomes.