News and consumer card payments

Guerino Ardizzi (), Simone Emiliozzi, Juri Marcucci and Libero Monteforte
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Guerino Ardizzi: Bank of Italy

No 1233, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: We exploit a unique daily data set on debit card expenditures to study the reaction of consumers to daily news relating to Economic Policy Uncertainty (EPU). Payments with debit cards are a proxy for consumption in the quarterly national accounts. Using big data techniques we construct daily EPU indexes, using either articles from Bloomberg news-wire or tweets from Twitter. Our empirical analysis at high frequency required estimates of daily seasonal components, finding strong patterns both within the week and within the month. Using local projections we find that daily shocks to EPU temporarily reduce debit card purchases, especially during the recent crisis; the main results are confirmed using monthly data and controlling for financial uncertainty and macroeconomic surprises. Furthermore, economic policy uncertainty affects the ratio between ATM withdrawals and debit card purchases, signaling an increase in households' preference for cash.

Keywords: consumption; payment system; policy uncertainty; big data; daily seasonality; local projections (search for similar items in EconPapers)
JEL-codes: C11 C32 C43 C52 C55 E52 E58 (search for similar items in EconPapers)
Date: 2019-10
New Economics Papers: this item is included in nep-big, nep-eec, nep-mac and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_1233_19

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