Sectoral Media Focus and Aggregate Fluctuations

Ryan Chahrour, Kristoffer Nimark and Stefan Pitschner

American Economic Review, 2021, vol. 111, issue 12, 3872-3922

Abstract: We formalize the editorial role of news media in a multisector economy and show that media can be an independent source of business cycle fluctuations, even when they report accurate information. Public reporting about a subset of sectoral developments that are newsworthy but unrepresentative causes firms across all sectors to hire too much or too little labor. We construct historical measures of US sectoral news coverage and use them to calibrate our model. Time-varying media focus generates demand-like fluctuations that are orthogonal to productivity, even in the absence of non-TFP shocks. Presented with historical sectoral productivity, the model reproduces the 2009 Great Recession.

JEL-codes: D22 D83 E32 L82 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/aer.20191895 (application/pdf)
https://doi.org/10.3886/E145301V1 (text/html)
https://www.aeaweb.org/doi/10.1257/aer.20191895.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/aer.20191895.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Sectoral Media Focus and Aggregate Fluctuations (2019)
Working Paper: Sectoral Media Focus and Aggregate Fluctuations (2016)
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:aea:aecrev:v:111:y:2021:i:12:p:3872-3922

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/aer.20191895

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().