Research Discussion Paper – RDP 2020-08 Start Spreading the News: News Sentiment and Economic Activity in Australia

Contents

• News, Sentiment and the Economy
• How Do We Measure News Sentiment?
• Is the News Sentiment Index Useful for Nowcasting?
• News Sentiment versus Uncertainty
• News Sentiment and the Economy
• News Sentiment and Monetary Policy
• Robustness Tests and Extensions
• Conclusion and Directions for Future Research
• Appendix A: LP and SLP Estimates Using Control Variables
• Appendix B: VAR Estimates with Different Ordering
• Appendix C: Granger-causality Tests
• References

For helpful comments and suggestions we thank Benjamin Beckers, James Bishop, Luci Ellis, Richard Evans, Luke Hartigan, Roman Kovalenko, John Simon, Susan Slocum, Kaja Stojkov and Benjamin Wong. The views expressed in this paper are those of the authors and do not necessarily reflect the views of the Reserve Bank of Australia. The authors are solely responsible for any errors.