Different newspapers, different expectations: My new working paper is out

I’m happy to share that my second working paper (and therefore the second chapter of my PhD thesis!) is now available on this webpage. In the economic expectations literature, it is a well-established fact that there are persistent differences in households‘ inflation expectations. In my paper, I explore the role of mass media as a possible driver of this heterogeneity. I collect German newspaper articles and construct newspaper-specific indicators by extracting their sentiment towards inflation with OpenAI’s large language model, ChatGPT-3.5. In a forecasting exercise, I test if some of the newspapers are more informative for the expectations of specific socioeconomic groups of households. Indeed, indices based on Germany’s most popular tabloid – Die Bild – are performing better in forecasting low-income and less-educated households‘ expectations, while the opposite holds true for the more reputable daily newspapers, Frankfurter Allgemeine Zeitung and Die Süddeutsche Zeitung.

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