Consumption, sentiment, and economic news

Martha Starr ()

No 2008-16, Working Papers from American University, Department of Economics

Abstract: This paper investigates the influence of economic news on consumer sentiment, and examines whether ‘news shocks’ –- changes in coverage that would not be expected from incoming data on economic fundamentals -– have aggregate effects. Using monthly U.S. data and a structural vector-autoregression, I find that (1) sentiment is affected by news shocks, (2) after filtering out effects of news shocks, shocks to sentiment still have positive effects on consumer spending, and (3) news shocks influence both spending and unemployment in significant, though transitory ways. These results are consistent with other evidence of a role of non-fundamental factors in aggregate fluctuations.

Keywords: Consumption; consumer sentiment; economic news; aggregate fluctuations (search for similar items in EconPapers)
JEL-codes: D12 E21 E32 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2008-09
New Economics Papers: this item is included in nep-cbe, nep-mac and nep-pke
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.17606/dpxv-sh50 First version, 2008 (application/pdf)

Related works:
Journal Article: CONSUMPTION, SENTIMENT, AND ECONOMIC NEWS (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:amu:wpaper:1608

Access Statistics for this paper

More papers in Working Papers from American University, Department of Economics
Bibliographic data for series maintained by Thomas Meal ().