Eye in the sky: Private satellites and government macro data

Abhiroop Mukherjee, George Panayotov and Janghoon Shon

Journal of Financial Economics, 2021, vol. 141, issue 1, 234-254

Abstract: We develop an approach to identify whether recent technological advancements—such as the rise of commercial satellite-based macro estimates—can provide an alternative to government data. We measure the extent to which satellite estimates affect the value of a government macro announcement using its asset price impact. Our identification relies on cloud cover, which prevents satellites from observing economic activity at a few key hubs. Applying our approach, we find that some satellite estimates are now so effective that markets are no longer surprised by government announcements. Our results point to a future in which the resolution of macro uncertainty is smoother and governments have less control over macro information.

Keywords: Alternative macroeconomic data; Satellite-based forecasts; Role of hubs in economic forecasting; US crude oil; Chinese Purchasing Managers’ Index (search for similar items in EconPapers)
JEL-codes: E44 G14 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:141:y:2021:i:1:p:234-254

DOI: 10.1016/j.jfineco.2021.03.002

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