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Do daily lead texts help nowcasting GDP growth?

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  • Marc Burri

Abstract

This paper evaluates whether publicly available daily news lead texts help nowcasting Swiss GDP growth. I collect titles and lead texts from three Swiss newspapers and calculate text-based indicators for various economic concepts. A composite indicator calculated from these indicators is highly correlated with low-frequency macroeconomic data and survey-based indicators. In a pseudo out-of-sample nowcasting exercise for Swiss GDP growth, the indicator outperforms a monthly Swiss business cycle indicator if one month of information is available. Improvements in nowcasting accuracy mainly occur in times of economic distress.

Suggested Citation

  • Marc Burri, 2023. "Do daily lead texts help nowcasting GDP growth?," IRENE Working Papers 23-02, IRENE Institute of Economic Research.
    • Handle: RePEc:irn:wpaper:23-02
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    References listed on IDEAS

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    5. Shapiro, Adam Hale & Sudhof, Moritz & Wilson, Daniel J., 2022. "Measuring news sentiment," Journal of Econometrics, Elsevier, vol. 228(2), pages 221-243.
    6. Wegmüller, Philipp & Glocker, Christian & Guggia, Valentino, 2023. "Weekly economic activity: Measurement and informational content," International Journal of Forecasting, Elsevier, vol. 39(1), pages 228-243.
    7. Bai, Jushan & Ng, Serena, 2013. "Principal components estimation and identification of static factors," Journal of Econometrics, Elsevier, vol. 176(1), pages 18-29.
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    Cited by:

    1. Marc Burri & Daniel Kaufmann & Nima Ostovan, 2024. "AI in economic research: A guide for students and instructors," IRENE Policy Reports 24-03, IRENE Institute of Economic Research.

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    More about this item

    Keywords

    Mixed-frequency data; composite leading indicator; news sentiment; recession; natural language processing; nowcasting;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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