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ECB Council Members’ Objectives and Public Debt at Home – Evidence from an AI-Based Textual Analysis

Authors examine the changing attention that ECB Governing Council members pay to different policy objectives by analysing more than 4,600 speeches given between the establishment of the ECB and the summer of 2024. Alongside the primary objective of price stability, they consider the following potential secondary objectives: financial stability, stability of the government bond market, sustainable public debt, climate protection and distribution. On the methodological side, authors take advantage of LLMs to identify the speeches’ coverage of each of these objectives and the associated support. They conduct a series of validation tests to verify our AI-based scores, including a conventional dictionary approach. They use two-way fixed effects regressions to search for a link between a country's level of public debt and the objective function of its representatives. The results suggest that objectives have become more diverse in recent years. […]