Forward guidance and the semiotic turn of the European Central Bank

ABSTRACT

This article discusses central bank forward guidance as a performative (Austin) and conative (Jakobson) practice – hence, as a form of audience-centred communication that intends to transform their behaviour when deployed by a narrator who is simultaneously also a character in the story. Taking the European Central Bank (ECB) as its primary example, the article conveys how the double role of narrator and character assumed by this institution renders it more permeable to reactions from the markets and the public. As such, ECB forward guidance is frequently misguided, with its communicative imperatives indeed being ‘corrected’ and ‘reoriented’ by market actors and publics wishing to perceive the European Central Bank as behaving like an impartial and just frontline hero. While acknowledging the presence of conversational features within these reflexive communication practices, the article approaches forward guidance as an unfolding story, not only due to the relevance of the characterisation processes through which the European Central Bank is repositioned as hero or villain by its publics, but also because exemplary episodes exhibit a reminiscent quality that isolates them from their original context and opens them up to the possibility of re-activation – as indeed happened during the recent Covid-19 pandemic crisis.

KEYWORDS:

• European Central Bank
• forward guidance
• monetary policy
• discourse
• tale
• characterisation

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This study was supported by the Portuguese Foundation for Science and Technology through the following grant: PTDC/IVC-ANT/4520/2014.

Notes on contributors

Alexandre Abreu

Alexandre Abreu is Assistant Professor of Economics and Development Studies in the School of Economics and Management at the University of Lisbon. He holds a PhD in Economics from the School of Oriental and African Studies at the University of London. His research interests include the political economy of development, income distribution and the Euro crisis.

Daniel Seabra Lopes

Daniel Seabra Lopes is Assistant Professor in the School of Economics and Management at the University of Lisbon, with a PhD in Cultural and Social Anthropology (New University of Lisbon). He has conducted ethnographic research among urban Roma communities and, more recently, in diverse institutional contexts, including retail banks and courts. He has published articles in a number of international journals, including Economy and Society, European Societies, Social Anthropology, Anthropological Quarterly, Cultural Studies and the Journal of Cultural Economy.