Masaryk University Economic Seminars

Our research measures emotions in US newspapers related to economic policy. The motivation of the study is to examine whether emotion decomposition provides information beyond conventional news-based uncertainty measures and sentiment indices, and could improve financial-market monitoring and forecasting. After emotion identification, we construct an emotion-related (sentiment) index and examine its impact on EPU, VIX, SP 500, and USD using the BVAR model. Preliminary results show that increases in negative emotions lead to persistent increases in the Economic Policy Uncertainty index and the VIX. In contrast, their effects on S&P 500 and US dollar returns are smaller, negative, and largely transitory. Positive-emotion shocks produce weaker and less precisely estimated responses.

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Subhasish Modak Chowdhury is a Professor at the University of Sheffield where he serves as the Director of the BRAINS research centre, and lead the Behavioural Economics Research Group. He is a microeconomist with research interests in contest theory, behavioral economics, industrial organization etc. Recently he joined the Journal of Competition Law & Economics as an Associate Editor.