THE 2007-2008 U.S. RECESSION: WHAT DID THE REAL-TIME GOOGLE TRENDS DATA TELL THE UNITED STATES?

In the extant literature of business cycle predictions, the signals for business cycle turning points are generally issued with a lag of at least 5 months. In this paper, we make use of a novel and timely indicator-the Google search volume data-to help to improve the timeliness of business cycle tur...

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Publicado en:Contemporary Economic Policy Vol. 33; no. 2; pp. 395 - 404
Autores principales: Chen, Tao, So, Erin Pik Ki, Wu, Liang, Yan, Isabel Kit Ming
Formato: Artículo
Publicado: Wiley-Blackwell Apr2015
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: THE 2007-2008 U.S. RECESSION: WHAT DID THE REAL-TIME GOOGLE TRENDS DATA TELL THE UNITED STATES?
      aug:
        au:
          Chen, Tao
          So, Erin Pik Ki
          Wu, Liang
          Yan, Isabel Kit Ming
        affil:
          Lee Shau Kee School of Business & Administration, Open University of Hong Kong, 30 Good Shepherd Street, Ho Man Tin, Kowloon, Hong Kong China
          Department of Economics, Hong Kong Baptist University, Kowloon Tong, Kowloon, Hong Kong China
          Department of Economics and Finance, City University of Hong Kong, Tat Chee Avenue, Kowloon, Hong Kong, China
      su:
        United States
        Google Inc.
        Recessions
        Business cycles
        Labor market
        Real-time computing
        Twentieth century
      sug:
        subj:
          Recessions
          Business cycles
          Labor market
          United States
          Google Inc.
          Real-time computing
          Twentieth century
      ab: In the extant literature of business cycle predictions, the signals for business cycle turning points are generally issued with a lag of at least 5 months. In this paper, we make use of a novel and timely indicator-the Google search volume data-to help to improve the timeliness of business cycle turning point identification. We identify multiple query terms to capture the real-time public concern on the aggregate economy, the credit market, and the labor market condition. We incorporate the query indices in a Markov-switching framework and successfully 'nowcast' the peak date within a month that the turning occurred. ( JEL E37, G17)
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