Sentiment and Uncertainty about Regulation
Tara Sinclair and
Zhoudan Xie ()
No 2021-004, Working Papers from The George Washington University, Department of Economics, H. O. Stekler Research Program on Forecasting
Regulatory policy can create economic and social benets, but poorly designed or excessive regulation may generate substantial adverse effects on the economy. In this paper, we present measures of sentiment and uncertainty about regulation in the U.S. over time and examine their relationships with macroeconomic performance. We construct the measures using lexicon-based sentiment analysis of an original news corpus, which covers 493,418 news articles related to regulation from seven leading U.S. newspapers. As a result, we build monthly indexes of sentiment and uncertainty about regulation and categorical indexes for 14 regulatory policy areas from January 1985 to August 2020. Impulse response functions indicate that a negative shock to sentiment about regulation is associated with large, persistent drops in future output and employment, while increased regulatory uncertainty overall reduces output and employment temporarily. These results suggest that sentiment about regulation plays a more important economic role than uncertainty about regulation. Furthermore, economic outcomes are particularly sensitive to sentiment around transportation regulation and to uncertainty around labor regulation.
Keywords: Regulation; text analysis; NLP; sentiment analysis; uncertainty (search for similar items in EconPapers)
JEL-codes: E2 E3 K2 O4 (search for similar items in EconPapers)
Pages: 80 pages
New Economics Papers: this item is included in nep-big, nep-law and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://www2.gwu.edu/~forcpgm/2021-004.pdf First version, 2021 (application/pdf)
Working Paper: Sentiment and uncertainty about regulation (2021)
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:gwc:wpaper:2021-004
Access Statistics for this paper
More papers in Working Papers from The George Washington University, Department of Economics, H. O. Stekler Research Program on Forecasting Contact information at EDIRC.
Bibliographic data for series maintained by GW Economics Department ().