Looking Up The Sky: Unidentified Aerial Phenomena and Macroeconomic Attention

66 Pages Posted: 25 Apr 2023 Last revised: 8 Jan 2024

See all articles by Nathan Goldstein

Nathan Goldstein

Bar-Ilan University - Department of Economics

Ohad Raveh

Hebrew University of Jerusalem

Date Written: January 4, 2024


Attention to information plays a key role in recent macroeconomic analysis, yet measuring it is a challenging endeavor, most notably in terms of covering varying geographical levels and time frequencies. We propose a novel, unconventional measure of public attention, which addresses these limitations, based on individuals’ reports of Unidentified Aerial Phenomena (UAP). We document a surprising link between UAP sightings and macroeconomic conditions at the U.S.-county, state, and national levels. Controlling for weather conditions, and external influences, UAP sightings are more common in wealthier regions, but within regions the pattern is counter-cyclical. Thus, variations in attention to exceptional phenomena in the skies point at more general patterns of variations in the public attention. We further support this interpretation by a quasi-experimental design that utilizes plausibly exogenous regional variations in COVID-19 restrictions and find evidence for a causal effect on public attention. We further show that the UAP sightings measure is highly correlated with conventional measures of attention that are based on expectations data. We then apply our measure in the context of monetary policy transmission. We find that it can account for sizable regional heterogeneity in the response to monetary shocks. Higher levels of attention across U.S. regions, as well as within regions over the business cycle, substantially mitigate the effect of monetary policy.

Keywords: Rational inattention, monetary policy, UAP

JEL Classification: E31; C83; D84

Suggested Citation

Goldstein, Nathan and Raveh, Ohad, Looking Up The Sky: Unidentified Aerial Phenomena and Macroeconomic Attention (January 4, 2024). Available at SSRN: https://ssrn.com/abstract=4424455 or http://dx.doi.org/10.2139/ssrn.4424455

Nathan Goldstein

Bar-Ilan University - Department of Economics ( email )

Ramat-Gan, 52900

Ohad Raveh (Contact Author)

Hebrew University of Jerusalem ( email )

Mount Scopus
Jerusalem, 91905

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