Real-Time Discovery of Corporate Risks

We propose a new methodology to discover emerging corporate risks in real time by analyzing the text of quarterly earnings conference calls from 2008 to 2025. Our approach identifies bigrams (two-word phrases) within risk-related sentences whose usage surges significantly and then groups them into thematic topics. The method successfully recovers a timeline of major economic events, from the credit crisis in 2008 to macroeconomic and tariff uncertainty in 2025. We find that firms manage these risks differently. While macroeconomic uncertainty is associated with reductions in investment and employment, a rise in trade uncertainty is associated with capital expenditures and hiring. These expansions, however, are also associated with higher inflation: Higher trade uncertainty is, on average, followed by significant increases in producer prices. Our findings demonstrate that not all uncertainty is alike and suggest that the recent rise of macroeconomic and trade uncertainty together poses a stagflationary risk.