A nice discussion by Aleš Bulíř, Martin Cihák, David-Jan Jansen in voxeu. The long paper is here.
There is a measure for measuring simplicity in language called – Flesch-Kincaid readability test. They use this to see which of the selected central banks communicate better and simpler.
Quality, clear communication is a very powerful tool for central banks because it influences expectations. This column presents new research on central-bank communications, using a formal measure of clarity – the ‘Flesch-Kincaid grade level’. The picture is varied: there are significant and persistent differences in clarity over time and across countries. However – and worryingly – the financial crisis is associated with unclear communication for some central banks.
We ask whether the clarity of central-bank communication depends on the context; if clarity is sensitive to the inflation outlook or uncertainty, or both; and how the global financial crisis has affected central-bank communication.
Under our null hypothesis, communication clarity is impaired when the bank is unsure about future developments or when it needs to explain larger deviations from the inflation target. Suppose that current inflation runs above the target, but the official inflation projection is close to the target, and the bank identified numerous mutually offsetting demand and supply inflation factors. It is going to be harder to present these developments in an accessible manner, presumably leading to less clarity. Nonetheless, the central bank may be aware of the need to present a clear message to the public and it may devote more resources to communication. If it succeeds, communication clarity may remain unchanged, or it may even improve.
The seven central banks are: Chile, Sweden, UK, ECB, Czech and Poland. Findings:
We find statistically significant variation in the Flesch-Kincaid over time for each of the seven central banks, partly reflecting idiosyncratic trends. The inflation reports have become clearer over time in Chile, Sweden, and the UK (although the UK’s reports became less clear after 2007), improving by almost one fifth of a year of schooling per year. In contrast, the Eurozone Monthly Bulletins and in particular Thai inflation reports have become less clear during the sample period, by about one tenth and two fifths of a year of schooling per year, respectively. For the Czech Republic and Poland there are no statistically significant trends. Turning to our main question of the relationship between the clarity of communications and the broader economic environment, only a handful of factors structurally appear to affect readability..
There is another such readability index I came to know of – Gunning-Fog index. Econolog.net which ranks econ blogs uses this to see which blogs are simple to read and so on. Proud and humbled to say Mostly Economics ranks really nicely on this. One just needs 9 years of schooling and is much better placed compared to other blogs..