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Eye in the Sky: Private Satellites and Government Macro Data

Author

Listed:
  • Abhiroop Mukherjee

    (Liwei Huang Associate Professor of Business, Department of Finance
    The Hong Kong University of Science and Technology)

  • George Panayotov

    (Associate Professor of Finance
    The Hong Kong University of Science and Technology)

  • Janghoon Shon

    (Ph.D. Candidate in Finance
    The Hong Kong University of Science and Technology)

Abstract

Relying on government announcements for macro information creates a potential conflict of interest and macro uncertainty. Many private entities have started using alternative data strategies to predict macro numbers. If alternative data strategies can work for macro predictions, we can get a sense of what is happening in the economy without having to rely on the government to inform us. We find a reduction in implied volatility and in price jumps in the U.S. crude oil market as a result of satellite-based inventory estimates. These findings point to a future in which the resolution of macro uncertainty is smoother, and governments have less control over macro information.

Suggested Citation

  • Abhiroop Mukherjee & George Panayotov & Janghoon Shon, 2020. "Eye in the Sky: Private Satellites and Government Macro Data," HKUST IEMS Thought Leadership Brief Series 2020-42, HKUST Institute for Emerging Market Studies, revised Sep 2020.
    • Handle: RePEc:hku:briefs:202042
    as

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    File URL: https://iems.ust.hk/assets/publications/thought-leadership-briefs/tlb43/hkustiems-tlb43-eye-in-the-sky-private-satellite-government-data.pdf
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    More about this item

    Keywords

    Technology; Satellites; macro-economic data;
    All these keywords.

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