(Almost) 200 Years of News-Based Economic Sentiment

Jules van Binsbergen, Svetlana Bryzgalova, Mayukh Mukhopadhyay and Varun Sharma

No 32026, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using text from 200 million pages of 13,000 US local newspapers and machine learning methods, we construct a 170-year-long measure of economic sentiment at the country and state levels, that expands existing measures in both the time series (by more than a century) and the cross-section. Our measure predicts GDP (both nationally and locally), consumption, and employment growth, even after controlling for commonly-used predictors, as well as monetary policy decisions. Our measure is distinct from the information in expert forecasts and leads its consensus value. Interestingly, news coverage has become increasingly negative across all states in the past half-century.

JEL-codes: E2 E3 E4 E40 E43 E44 G01 G1 G10 G14 G17 G18 G40 (search for similar items in EconPapers)
Date: 2024-01
New Economics Papers: this item is included in nep-big, nep-cmp, nep-fmk and nep-his
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