In the aftermath of the Financial Crisis of 2007-08 the notion emerged that the ECB had almost unnoticeably altered its interpretation of the frequently criticized monetary pillar within its monetary policy strategy. The focus, it seemed, had shifted away from monitoring long-term inflationary pressures based on money growth, towards monitoring more closely the stability of the European financial system. We apply a structural topic model to test whether this shift in strategy is just the subjective reading of academic scholars or actually reflected in a quantitative measure based on the ECB’s monetary policy communication. Aside from revealing this shift empirically, we ask how such a shift affects the ECB’s capability to achieve its macroeconomic objectives.
