Does Finance Benefit Society? A Language Embedding Approach

47 Pages Posted: 3 Aug 2020 Last revised: 24 Nov 2021

See all articles by Manish Jha

Manish Jha

Georgia State University - Department of Finance

Hongyi Liu

Washington University in St. Louis - Department of Economics

Asaf Manela

Washington University in St. Louis - John M. Olin Business School

Date Written: July 18, 2020

Abstract

We measure popular sentiment toward finance using a computational linguistics approach applied to millions of books published in eight countries over hundreds of years. We document persistent differences in finance sentiment across countries despite ample time-series variation. Books written in the languages of more capitalist countries discuss finance in a more positive context. Finance sentiment declines one year before rather than after financial crises. Positive shocks to finance sentiment lead to greater GDP and credit growth.

Keywords: sentiment, text analysis, word embedding, BERT, transfer learning, financial crises

JEL Classification: C82, E44, G52, N40, Q54

Suggested Citation

Jha, Manish and Liu, Hongyi and Manela, Asaf, Does Finance Benefit Society? A Language Embedding Approach (July 18, 2020). Available at SSRN: https://ssrn.com/abstract=3655263 or http://dx.doi.org/10.2139/ssrn.3655263

Manish Jha

Georgia State University - Department of Finance ( email )

University Plaza
Atlanta, GA 30303-3083
United States
3142508129 (Phone)

HOME PAGE: http://mjha91.github.io

Hongyi Liu (Contact Author)

Washington University in St. Louis - Department of Economics ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States
314-250-7428 (Phone)

HOME PAGE: http://hongyiliu.wixsite.com/myhomepage

Asaf Manela

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States
314-935-9178 (Phone)

HOME PAGE: http://apps.olin.wustl.edu/faculty/manela

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