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Sectoral Effects of News Shocks

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  • Marija Vukotić

Abstract

This paper argues that an aggregate news shock reveals news about technological improvements in the durable goods sector. Better technological prospects translate into large responses of the fundamentals in the durable goods sector; much larger than the responses of the fundamentals in the non‐durable goods sector. These better technological prospects, contrary to common belief, do not induce short‐run comovement among fundamentals within either of the two sectors. The behaviour of inventories, an important margin that durable goods producers can use to buffer news shocks, proves to be crucial for reconciling the effects of news shocks in a two‐sector model with the data.

Suggested Citation

  • Marija Vukotić, 2019. "Sectoral Effects of News Shocks," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 81(2), pages 215-249, April.
    • Handle: RePEc:bla:obuest:v:81:y:2019:i:2:p:215-249
    DOI: 10.1111/obes.12269
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    Cited by:

    1. repec:rim:rimwps:22-11 is not listed on IDEAS
    2. Goto, Eiji & Bürgi, Constantin, 2021. "Sectoral Okun's law and cross-country cyclical differences," Economic Modelling, Elsevier, vol. 94(C), pages 91-103.
    3. Danilo Cascaldi-Garcia & Marija Vukotic, 2022. "Patent-Based News Shocks," The Review of Economics and Statistics, MIT Press, vol. 104(1), pages 51-66, March.
    4. Anastasios Evgenidis & Apostolos Fasianos, 2025. "AI news shocks and the macroeconomy: evidence from UK patent data," IFS Working Papers W25/48, Institute for Fiscal Studies.
    5. Christoph Görtz & Christopher Gunn & Thomas Lubik, 2018. "Taking Stock of TFP News Shocks: The Inventory Comovement Puzzle," Carleton Economic Papers 18-05, Carleton University, Department of Economics, revised 14 Jul 2018.
    6. Eiji Goto, 2020. "Industry Impacts of Unconventional Monetary Policy," 2020 Papers pgo873, Job Market Papers.

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