Breen, Michael ORCID: 0000-0002-5857-9938, McMenamin, Iain ORCID: 0000-0002-1704-390X, Courtney, Michael and McNulty, Gemma ORCID: 0000-0002-6909-6958 (2020) Daily judgement: political news and financial markets. New Political Economy, 26 (4). pp. 606-630. ISSN 1356-3467
Abstract
Political economists disagree about the extent to which markets monitor politics in advanced economies. Some argue that investors are interested in a handful of macroeconomic indicators, while others say that markets also watch political competition closely. We argue that political competition drives variation in the government bond market more than information about economic policy. Using a new automatic classifier, we code the content of millions of newspaper paragraphs about the UK from 1986 to 2012. We then test the impact of news on government debt. We find that political news is correlated with bond prices and that macroeconomic policy news is not. Our results suggest that the market passes daily judgement on politics, not merely cleaving to seldom-released official statistics or focusing on occasional events like elections.
Metadata
Item Type: | Article (Published) |
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Refereed: | Yes |
Uncontrolled Keywords: | political economy; sovereign debt; economic policy; advanced economies; automatic content analysis |
Subjects: | Computer Science > Machine learning Social Sciences > Globalization Social Sciences > Mass media Social Sciences > Political science |
DCU Faculties and Centres: | DCU Faculties and Schools > Faculty of Humanities and Social Science > School of Law and Government |
Publisher: | Taylor & Francis |
Official URL: | https://doi.org/10.1080/13563467.2020.1806221 |
Copyright Information: | © 2020 Taylor & Francis |
Funders: | Irish Research Council |
ID Code: | 25486 |
Deposited On: | 18 Feb 2021 13:22 by Michael Breen . Last Modified 28 Feb 2022 13:46 |
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