The Narrative About the Economy as a Shadow Forecast: An Analysis Using Banco De España Quarterly Reports
24 Pages Posted: 29 Dec 2020
Date Written: December 29, 2020
The aim of this paper is to construct a text-based indicator that reflects the sentiment of the Banco de España economic outlook reports. Our sentiment indicator mimics very closely the first release of the GDP growth rate, which is published after the publication of the reports, and the Banco de España quarterly forecasts of the GDP growth rate. This means that the qualitative narrative contained in the reports contains similar information to the one conveyed by the quantitative forecasts. In addition, the narrative complements the quantitative projections by discussing information which is not directly reflected in the point forecasts.
Keywords: textual analysis, sentiment analysis, GDP growth rate, forecasting, central bank reports
JEL Classification: C53, C55, E37, E66, E58
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