Direkt zum Inhalt

Reading between the Lines: Using Media to Improve German Inflation Forecasts

Discussion Papers 1665, 19 S.

Benjamin Beckers, Konstantin A. Kholodilin, Dirk Ulbricht

2017

get_appDownload (PDF  0.55 MB)

Abstract

In this paper, we examine the predictive ability of automatic and expert-rated media sentiment indicators for German inflation. We find that sentiment indicators are competitive in providing inflation forecasts against a large set of common macroeconomic and financial predictors. Sophisticated linguistic sentiment algorithms and business cycle news rated by experts perform best and are superior to simple word-count indicators and autoregressive forecasts.

Konstantin A. Kholodilin

Research Associate in the Macroeconomics Department



JEL-Classification: C53;E31;E37
Keywords: Inflation prediction, media sentiment indicators, news reports, real-time forecasting
Frei zugängliche Version: (econstor)
http://hdl.handle.net/10419/161657

keyboard_arrow_up