IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Sectoral Media Focus and Aggregate Fluctuations

Listed author(s):
  • Ryan Chahrour

    (Boston College)

  • Kristoffer Nimark

    (Cornell University)

In this paper, we formalize the monitoring and editorial functions of news media within a multi-sector macroeconomic model. Each sector is subject to sector-specific productivity shocks, which are perfectly observed by firms in that sector. In addition to their local information, firms also learn from the news media about the developments in those sectors that the media choose to cover. Which sectors news media report about is a deterministic function of the cross-section of sectoral productivity shocks and the network structure of production. When the most newsworthy sectors are unrepresentative of the rest of the economy, the public nature of media reporting generates prediction errors about economic conditions that are correlated across sectors. Sectoral media focus can thus cause fluctuations in aggregate output that are caused by undue optimism or pessimism shared by all sectors in the economy. Because what news media report and how firms' resulting posteriors differ from the true state of the world are deterministic functions of the cross-section of productivity shocks, the theory makes tight predictions about when and why firms will be unduly optimistic or pessimistic.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Society for Economic Dynamics in its series 2016 Meeting Papers with number 1034.

in new window

Date of creation: 2016
Handle: RePEc:red:sed016:1034
Contact details of provider: Postal:
Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:red:sed016:1034. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.