Trade sentiment and the stock market: new evidence based on big data textual analysis of Chinese media

Trade tensions between China and US have played an important role in swinging global stock markets but effects are difficult to quantify. We develop a novel trade sentiment index (TSI) based on textual analysis and machine learning applied on a big data pool that assesses the positive or negative tone of the Chinese media coverage, and evaluates its capacity to explain the behaviour of 60 global equity markets.

E-commerce in the pandemic and beyond

E-commerce has ramped up during the pandemic around the world. The growth has differed across sectors and over different stages of the pandemic. Novel data sources can help to follow these trends. The growth of e-commerce has been higher in countries where there were more stringent containment measures and where e-commerce was initially less developed. Some changes in consumers' shopping habits and payment behaviour may be longer-lasting. This may have implications for structural change and the growth of the digital economy.

Can consumers’ inflation expectations help stabilise the economy?

Economists have argued that when interest rates set by policymakers cannot go any lower, the economy can be stabilised if consumers expect the rate of inflation to increase. Yet, the evidence for this stabilising effect has been very mixed. In this article we review new evidence from a monthly survey of over 25,000 individual consumers across the euro area showing that consumers are indeed more ready to spend if they expect inflation to be higher in the future.

Firm-level R&D after periods of intense technological innovation: the role of investor sentiment

Following periods of intense technological innovation, R&D is a critical driver of technology diffusion, but it is subject to frictions that can lower it below the level firms would undertake otherwise. We study whether sentiment can counterbalance these frictions and thus strengthen the link between firm-level R&D and lagged aggregate innovation. We find a positive answer for low-tech firms, which represent the main conduit for technology diffusion.

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