What Can Earnings Calls Tell Us About the Output Gap and Inflation in Canada?
Marc-André Gosselin and
No 2023-13, Discussion Papers from Bank of Canada
We construct new indicators of the imbalance between demand and supply for the Canadian economy by using natural language processing techniques to analyze earnings calls of publicly listed firms. The results show that the text-based indicators are highly correlated with official inflation data and estimates of the output gap and improve the accuracy of inflation forecasts. This suggests that these indicators could help central banks foresee inflationary pressures in the economy. Our examination of other topics in earnings calls, such as supply chain disruptions and capacity constraints, points to the potential benefits of using textual data to quickly draw insights on a range of relevant topics. We conclude that text-based measures of economic slack should be included in central banks’ monitoring and forecasting toolkits.
Keywords: Central bank research; Domestic demand and components; Econometric and statistical methods; Inflation and prices; Potential output (search for similar items in EconPapers)
JEL-codes: C1 C3 E3 E5 (search for similar items in EconPapers)
Pages: 29 pages
New Economics Papers: this item is included in nep-big and nep-cba
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://www.bankofcanada.ca/2023/06/staff-discussion-paper-2023-13/ Abstract (text/html)
https://www.bankofcanada.ca/wp-content/uploads/2023/06/sdp2023-13.pdf Full text (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bca:bocadp:23-13
Access Statistics for this paper
More papers in Discussion Papers from Bank of Canada 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada. Contact information at EDIRC.
Bibliographic data for series maintained by ().