'Nowcasting' the Belgian Economy

13 Pages Posted: 3 Aug 2011

See all articles by Jacques R. Bughin

Jacques R. Bughin

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECORE) ; McKinsey & Company

Date Written: August 2, 2011

Abstract

This paper leverages the interface Google Insights for Search to 'nowcast' Belgian macro-economic indicators such as retail consumer spending and unemployment. Using a general ECM framework, the analysis demonstrates that economic fluctuations correlate with Google search intensity. In particular, a 10 percent increase in the intensity of search tends to increase retail spending and unemployment claim fluctuations by about 0.5 and 0.4 percent (respectively) in the same month, for a total effect culminating after one quarter of about 2 and 1 percent, respectively. Disaggregating retail sales by sub-category, such as food or apparel sales, we found similar estimates of search elasticities to sales fluctuations. Additionally, we find that for food retailing, search queries also correlate with level, on top of fluctuations of sales. In general, search queries explain between 16 to 46 percent of the variance in fluctuations in retail sales and unemployment in Belgium for the period 2004 to 2011.

Keywords: Google trends, nowcasting

JEL Classification: C3, C8, E2, J2, M3

Suggested Citation

Bughin, Jacques R., 'Nowcasting' the Belgian Economy (August 2, 2011). Available at SSRN: https://ssrn.com/abstract=1903791 or http://dx.doi.org/10.2139/ssrn.1903791

Jacques R. Bughin (Contact Author)

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECORE) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium
00 32 2 645 4230 (Phone)
00 32 2 646 4548 (Fax)

McKinsey & Company ( email )

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Brussels, Quebec 1050
Belgium

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