Asymmetric Perceptions of the Economy: Media, Firms, Consumers, and Experts

20 Pages Posted: 17 Jun 2015

See all articles by Konstantin A. Kholodilin

Konstantin A. Kholodilin

German Institute for Economic Research (DIW Berlin)

Christian Kolmer

Unicepta GmbH

Tobias Thomas

Media Tenor International

Dirk Ulbricht

German Institute for Economic Research (DIW)

Date Written: June 1, 2015

Abstract

This article sheds light on the interaction of media, economic actors, and economic experts. Based on a unique data set of 86,000 news items rated by professional analysts of Media Tenor International and survey data, we first analyze the overall tone of the media, consumers’, firms’, and economic experts’ opinions on the state and outlook of the economy. Second, we assess the protagonist’s ability at correctly predicting GDP. Third, we use Granger causality tests to uncover who is influencing whom when it comes to the formation of opinions on the economy. We find that media reports have a significant negative bias. The economic sentiment of the media, consumers and firms does not reflect the actual situation. Finally, we find that media sentiment is not influenced by any other actor. In contrast, media appear to affect all other actors.

Keywords: media bias, consensus forecasts, consumer and business sentiment

JEL Classification: E32, E37, L82

Suggested Citation

Kholodilin, Konstantin A. and Kolmer, Christian and Thomas, Tobias and Ulbricht, Dirk, Asymmetric Perceptions of the Economy: Media, Firms, Consumers, and Experts (June 1, 2015). DIW Berlin Discussion Paper No. 1490. Available at SSRN: https://ssrn.com/abstract=2619571 or http://dx.doi.org/10.2139/ssrn.2619571

Konstantin A. Kholodilin (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Christian Kolmer

Unicepta GmbH ( email )

Salierring 47-53
Köln, 50677
Germany
+4902219902286 (Phone)

Tobias Thomas

Media Tenor International ( email )

Alte Jonastr. 48
Lake Zürich, 8640
Switzerland

Dirk Ulbricht

German Institute for Economic Research (DIW) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

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