A Thousand Words Tell More Than Just Numbers: Financial Crises and Historical Headlines

Kim Ristolainen, Tomi Roukka and Henri Nyberg
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Tomi Roukka: Department of Economics, Turku School of Economics, University of Turku, Finland

No 149, Discussion Papers from Aboa Centre for Economics

Abstract: We show that financial crises are preceded by changes in specific types of narrative information contained in newspaper article titles. Our novel international dataset and the resulting empirical evidence are gathered by integrating information from a large panel of economic news articles in global newspapers between the years 1870 and 2016 with conventional macroeconomic and financial indicators. We find that the predictive information of newspaper article titles that signals coming crisis episodes is substantial over and above the macroeconomic and financial indicators. The new indicators capture common features that have often been discussed as potential causes of specific crises but which have not been incorporated into empirical models.

Keywords: financial crisis; text data; leading indicators; topic model (search for similar items in EconPapers)
JEL-codes: C25 C82 G00 G01 N01 (search for similar items in EconPapers)
Pages: 50
Date: 2021-11
New Economics Papers: this item is included in nep-big, nep-fdg and nep-his
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Related works:
Journal Article: A thousand words tell more than just numbers: Financial crises and historical headlines (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:tkk:dpaper:dp149

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