Affiliation:
1. Fakultät für Wirtschafts- und Sozialwissenschaften (WiSo) , Helmut-Schmidt-Universitat Universitat der Bundeswehr Hamburg , Holstenhofweg 85 , 22043 Hamburg , Germany
Abstract
Abstract
I analyze the narratives that accompany business cycle forecasting reports of three German institutes using topic models. To this end, I gather multiple similar topics into different economic subject categories, allowing me to map shifting prioritizations within and between these subjects. Subsequently, I examine whether forecasting narratives contain additional information not captured by traditional indicators and include them in a random forest-based investment-forecast efficiency analysis. I find multiple correlations between narratives and forecast errors and conclude that forecasters inefficiently incorporate qualitative information in these cases. I raise the idea that further investigations with more precise identification of forecasting narratives could improve qualitative information processing or lead to scientific guidelines for forecast adjustments.
Subject
Economics and Econometrics,Social Sciences (miscellaneous),General Business, Management and Accounting
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