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Asymmetric Perceptions of the Economy: Media, Firms, Consumers, and Experts

Listed author(s):
  • Konstantin Kholodilin
  • Christian Kolmer
  • Tobias Thomas
  • Dirk Ulbricht

This article sheds light on the interaction of media, economic actors, and economic experts. Based on a unique data set of 86,000 news items rated by professional analysts of Media Tenor International and survey data, we first analyze the overall tone of the media, consumers’, firms’, and economic experts’ opinions on the state and outlook of the economy. Second, we assess the protagonist’s ability at correctly predicting GDP. Third, we use Granger causality tests to uncover who is influencing whom when it comes to the formation of opinions on the economy. We find that media reports have a significant negative bias. The economic sentiment of the media, consumers and firms does not reflect the actual situation. Finally, we find that media sentiment is not influenced by any other actor. In contrast, media appear to affect all other actors.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.508116.de/dp1490.pdf
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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1490.

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Length: 18 p.
Date of creation: 2015
Handle: RePEc:diw:diwwpp:dp1490
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  1. Jan Grossarth-Maticek & Johannes Mayr, 2008. "Medienberichte als Konjunkturindikator," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 61(07), pages 17-29, April.
  2. Kholodilin, Konstantin A. & Thomas, Tobias & Ulbricht, Dirk, 2014. "Do media data help to predict German industrial production?," DICE Discussion Papers 149, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  3. Bernhardt, Dan & Krasa, Stefan & Polborn, Mattias, 2008. "Political polarization and the electoral effects of media bias," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1092-1104, June.
  4. Tim Groseclose & Jeffrey Milyo, 2005. "A Measure of Media Bias," The Quarterly Journal of Economics, Oxford University Press, vol. 120(4), pages 1191-1237.
  5. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
  6. Klaus Abberger, 2007. "Forecasting Quarter-on-Quarter Changes of German GDP with Monthly Business Tendency Survey Results," ifo Working Paper Series 40, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
  7. Justus Haucap & Tobias Thomas & Gert G. Wagner, 2015. "Zu wenig Einfluss des ökonomischen Sachverstands? Empirische Befunde zum Einfluss von Ökonomen und anderen Wissenschaftlern auf die Wirtschaftspolitik," Discussion Papers of DIW Berlin 1449, DIW Berlin, German Institute for Economic Research.
  8. Schröder, Michael & Hüfner, Felix P., 2002. "Forecasting economic activity in Germany: how useful are sentiment indicators?," ZEW Discussion Papers 02-56, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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