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Media Reporting and Business Cycles: Empirical Evidence based on News Data

Lamla, Michael J. and Lein, Sarah M. and Sturm, Jan-Egbert. (2019) Media Reporting and Business Cycles: Empirical Evidence based on News Data. WWZ Working Papers, 2019 (05). Basel.

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Official URL: https://edoc.unibas.ch/70311/

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Abstract

Recent literature suggests that news shocks could be an important driver of economic cycles. In this article, we use a direct measure of news sentiment derived from media reports. This allows us to examine whether innovations in the reporting tone correlate with changes in the assessment and expectations of the business situation as reported by rms in the German manufacturing sector. We nd that innovations in news reporting aect business expectations, even when conditioning on the current business situation and industrial production. The dynamics of the empirical model conrm theoretical predictions that news innovations aect real variables such as production via changes in expectations. Looking at individual sectors within manufacturing, we nd that macroeconomic news is at least as important for business expectations as sector-specic news. This is consistent with the existence of information complementarities across sectors.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Makroökonomie (Lein)
12 Special Collections > WWZ Publications > WWZ Discussion Papers and Working Papers
UniBasel Contributors:Lein, Sarah M.
Item Type:Working Paper
Publisher:WWZ
Number of Pages:29
Note:Publication type according to Uni Basel Research Database: Discussion paper / Internet publication
Language:English
Identification Number:
  • handle: RePEc:bsl:wpaper:2019/05
Last Modified:13 Jun 2019 12:25
Deposited On:03 May 2019 14:51

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