Distance between the ECB and national central banks

Data: Introduction to annual reports of European central banks from 1999 to 2020 (manually collected from officieal sites).

Analysis: Hellinger distance applied to topics defined previously.

Visualization: Tableau.

Description: I build on a corpus of introductions to annual reports of European central banks (CBs) that constituted the Eurosystem, the monetary authority of the Eurozone. Eurosystem comprises the European Central Bank (ECB) and national central banks (NCBs) that adopted the euro as a single currency. In the analysis, I address the communication of 10 NCBs that launched the euro in 1999*, and the CB of Greece that joined the Eurosystem in 2001.

I use previously defined 25 topics (main themes of a text collection) to measure pairwise distances between the ECB and national central banks (NCBs). As a result of topic modeling, each document of the text collection is quantified as a distribution of topics, i.e., a list combining topic indices and topic shares in the document. Hence, I apply Hellinger distance metrics on these distributions to measure distances between text pairs (introductions to annual reports, in my case). Higher values correspond to more distance, and lower – to more similarity.

I visualize the results as an interactive dashboard in Tableau that shows the distance dynamics between individual NCBs and the ECB.

* The CB of Portugal, the 11th NCB to start the Eurosystem, is excluded from the analysis for the lack of data.