The economy. How do the media cover it and what are the effects? A literature review

This article provides an overview of key findings in the field of economic news research. The focus is on the relationship between the real economy and economic news, and the subsequent effects of economic news on people's economic perceptions. Additionally, we discuss research that looks into the construction of economic and financial news. Recommendations for future research relate to the application of mixed methods approaches and individual level studies, and a specific focus on new (social) media.     

The Predictive Value of Consumer Confidence Measures

Relatively simple measures of consumer confidence can frequentlylead more complex economic indicators, and/or counter or resistthe trends indicated by the industrial and financial segmentsof the economy. This article describes a number of such consumersurvey measurements and compares one of them with a more sophisticatedset of economic indicators.     

CONSUMPTION,SENTIMENT, AND ECONOMIC NEWS

This paper investigates the influence of economic news on consumer sentiment, and examines whether “news shocks”—changes in coverage that would not be expected from incoming data on economic fundamentals—have aggregate effects. Using monthly U.S. data and a structural vector autoregression, I find that (1) sentiment is affected by news shocks; (2) after filtering out effects of news shocks, shocks to sentiment still have positive effects on consumer spending; and (3) news shocks influence both spending and unemployment in significant, though transitory ways. These results are consistent with other evidence of a role of nonfundamental factors in aggregate fluctuations. (JEL E21, E32, D12)     

CONSUMER CONFIDENCE AND ECONOMIC FLUCTUATIONS

If consumers become pessimistic about the state of the economy, can there be a slowdown in output, even if their pessimism is not based on economic fundamentals? Recent macroeconomic models show the answer is yes, if there are “strategic complementarities” and multiple equilibria. We investigate the link between consumer confidence and economic fluctuations using vector autoregressions. In all models, after controlling for economic fundamentals, the hypothesis that consumer sentiment does not cause GNP (in the Granger sense) can be rejected. Variance decompositions suggest that consumer sentiment accounts for between 13 and 26 percent of the innovation variance of GNP.     

Climbing out of an economic crisis: A cycle of consumer sentiment and personal stress

This research examines bidirectional relationships between consumer sentiment and personal stress. It seeks to answer the question whether reduced consumer sentiment (consumer perceptions about the global, national and personal economic situation) raises personal stress levels, and whether increased personal stress levels depresses consumer sentiment. Finding such relationships would reveal a pathway from economic to personal well-being, as reflected in personal stress, and the other way around. A large longitudinal study in the Netherlands with a total of eight waves across three years (2012–2014), 4 waves during and 4 waves after the recent worldwide economic crisis, finds on average low personal stress levels among consumers, which is reassuring. Also and as expected, consumers are more positive about the state of the economy after than during the crisis. Importantly, more positive consumer sentiment indeed contributes to lower levels of personal stress. Moreover, the more personal stress consumers experience, the more pessimistic they are about the state of the economy after the crisis, whereas this connection is weaker during the crisis. This sheds new light on the pathways between consumer sentiment about the economy and their personal well-being.     

THE REACTION OF EXCHANGE RATES TO ECONOMIC NEWS

This paper examines the short-run responses of spot exchange rates to several types of economic news. Survey data are used to divide economic announcements into expected and unexpected components with the latter measuring news. The results indicate that exchange rates are systematically related to unexpected money announcements after the October 1979 switch in Federal Reserve operating procedures but not before. This response does not appear to have changed, however, after the October 1982 Federal Reserve regime change. Short-run exchange rate movements are not systematically related to news on inflation or real activity.     

The structure of consumer confidence in four EEC countries

This paper reports an exploration of the structure of consumer confidence in four of the countries participating in the EEC harmonized consumer attitudes surveys. The analysis is based on two EEC surveys in each of the countries concerned and uses the rotated solutions on the first three factors of the data. It was found that the different countries and surveys had similar factor structures which were interpreted as general economic conditions: personal financial circumstances; household durable buying intentions. The position of price expectations and attitudes to saving within these factor structures is also of interest in the interpretation of consumer behaviour.     

The nature of preferences: An exploration of the relationship between economics and psychology

Ordinal utility theory begins with the assumption of a consumer of given preferences, therefore, we must go beyond economic theory in order to investigate the nature of preferences without becoming circular. The approach here is to use interpersonal theories of personality development to investigate the formation of the preferences of the individual consumer. To establish a methodological relationship between economics and psychology, a common ground of analysis and an integrative framework must be provided to bring the contributions of psychology into economics into a systematic way. This is explored by using specific psychoanalytic theories of the internalization of interpersonal relations, and by relating this to a more general theory of personality development based on the significance of interpersonal relations. The objective of this study is a broader understanding of the behavioral foundations of the economic theory of the consumer, and a greater appreciation for preference structures which do not conform to the concept of the rational consumer of economic theory.     

The Economic Effect of Refugee Crises on Neighbouring Host Countries: Empirical Evidence from Pakistan

There is a considerable debate in terms of opportunities and challenges about the presence of refugees in the neighbouring host countries. Most of the existing discourse has focused only on their humanitarian and security implications. This article, on the other hand, seeks to uncover this issue through a purely economic lens, focusing on the economic impact of more than three million Afghan refugees in Pakistan. Utilizing data for the period 1979–2014 and the ARDL bounds testing approach, we arrive at few important conclusions. The empirical results indicate that Afghan refugees have a strong negative impact on economic growth in Pakistan. The effect holds in both the short run and the long run, suggesting that the influx of refugees lowers real economic activity in the country. Ultimately, the study implies that hosting refugees can never be a boon to Pakistan's economy.     

Crime news,fear of crime,and mistrust: an examination of protective factors against influences of local crime news

This study investigates interpersonal communication ties and a neighborhood context as moderators of the influences of local crime news on fear of crime and mistrust. Data from a web survey of residents in Chicago show that the relationship between attention to local crime news and fear of crime is weaker for respondents who more frequently communicate with neighbors both intimately and casually and who live in more walkable neighborhoods. Data also indicate that the relationship between local crime news and mistrust is weaker for those who more often communicate with neighbors intimately and live in more walkable neighborhoods. Findings are discussed in terms of protective factors against the negative influences of local crime news.     

TURNS IN CONSUMER CONFIDENCE: AN INFORMATION ADVANTAGE LINKED TO MANUFACTURING

This research shows that the manufacturing sector contains private information advantages for consumer confidence. It examines the consumer confidence–manufacturing link by comparing the U.S. national-level Index of Consumer Sentiment with identically constructed confidence indices from a key manufacturing state and a nonmanufacturing state. Granger causality analysis shows that the manufacturing state's confidence index leads the national index, whereas the nonmanufacturing state's confidence index lags it. Factors influencing confidence include percentage manufacturing employment, equity markets indicators, and disposable income. Fitting a consumption function to confidence measures for the three confidence indices shows the strongest relationship to be in the manufacturing state. (JEL D12 )     

Stale economic news,media and the stock market

I employ a classification of headlines from newspapers and wire services to examine whether stale macroeconomic news affects stock prices. Unlike with individual stocks, the cost of obtaining information about major economic releases is relatively low. Thus, stock prices should adjust to economic news announcements prior to their coverage in newspapers. I find statistically and economically significant relationship between stale news stories on unemployment and next week’s S&P 500 returns. This effect is then completely reversed during the following week. These findings show that investors are affected by salient information and support the hypothesis that investors overreact to stale macroeconomic news reported in newspapers.     

ECONOMIC NEWS ON TELEVISION: THE DETERMINANTS OF COVERAGE

This paper examines the television networks' coverage of theunemployment rate, the inflation rate as measured by the ConsumerPrice Index, and the growth rate of real GNP over the twelveyears from 1973 through 1984. This time period includes twomajor recessions, two severe bursts of inflation, and threepresidential elections. A common complaint is that the networksoveremphasize bad economic news. Using two measures of coverage,this paper examines whether the television networks give greatercoverage to these statistics when they are deteriorating. Theempirical results reveal that the networks do give greater coverageto bad economic news during nonelection years, but this patterndisappears during election years. The empirical results alsoreveal that presidential comments are very powerful in shapingthe amount of coverage given to these economic statistics.     

Institutionalization of Trust as Response to Globalization: The Case of Consumer Cooperatives in South Korea

This paper explores an explanation which elaborates how individuals effectively enact and sustain trust in the sphere of social economy and the capability. I discuss how value employed by actors and the strategies and power relation in the socio-economic value sphere and focus on the function of ‘trust’ as the key mechanism of the interaction. This paper examine South Korean consumer cooperative Hansalim as a case of social economy which successfully institutionalize their system in competitive economic market arena.      

Examining the impact of news attention and education on political tolerance in Hong Kong

This study examines the interrelationships amongst and between news attention, education, and political tolerance. Based on the theoretical presumption that the mainstream news media tend to reflect the prejudices and ideologies of the dominant groups in a society, news portrayal of groups regarded as deviant and/or controversial can be expected to be negative in valence. Hence, news attention is expected to lead to more negative attitudes toward such groups, which in turn breeds intolerance toward them. Meanwhile, education may moderate the relationship between news attention and tolerance. Research questions and hypotheses are examined through analyzing the data from a representative survey conducted in Hong Kong. The findings confirm the negative, indirect effect of news attention on tolerance through attitude toward deviant groups. Education is also found to relate to tolerance in a complicated and contradictory manner: while education has a direct positive effect on tolerance, it also strengthens the negative impact that attitude toward deviant groups has on tolerance. The theoretical and social implications of the findings are discussed.     

Measuring changes in consumer confidence

Consumer confidence indicators are surveyed monthly and each month concern different individuals. This complicates a straightforward interpretation of shifts in confidence. First, it is not clear how many respondents switch from and to negative, neutral and positive opinions in consecutive months. Second, reported net changes in confidence may be largely driven by the different respondent samples used over time. The proposed methodology addresses both issues. It involves estimating unobserved switching between negative, neutral and positive opinions for what can be thought of as being the same set of individuals. Next, a new change-in-confidence measure is developed from these switching proportions and the associated confidence bounds are computed for testing purposes. Applications to US and Dutch confidence data show that US respondents tend to switch attitudes more often than their Dutch counterparts do. Furthermore, the illustrations show that monthly changes in consumer confidence are not often significantly different from zero. Hence, claims about increased or decreased confidence should be made with care.     

中国经济运行“新常态”解析

近3年,中国经济整体运行有以下特征：经济增速是中高速的,且有小幅波动,就业基本平衡,低水平通胀,出现局部性金融风险,管理部门出台了有限度的经济刺激政策.但目前,中国经济运行主要有以下风险：持续通缩,房地产投资增速回落,市场违约风险显性化,联保联贷的风险.要维持经济新的运行状态,货币政策应保持宽松的基调不变,但要使资金进入实体经济,财政政策可更积极一些,尤其是要关注小微企业.     

Model Hong Kong malls and their development in mainland China: consumer iconicity and the trans/national capitalist class

Relational geographies of capital and consumption between Hong Kong and mainland China have been forming through tourism engagement in Hong Kong and the development of model Hong Kong malls in China. This analysis of urban restructuring for the consumer economy identifies how landmark Hong Kong malls are reproduced in major cities of China by networks of Hong Kong property firms and mainland elites. Adapting Leslie Sklair's formulation of architectural iconicity in the culture‐ideology of consumerism, this economic relationship, which restructures urban space, constructs iconic built forms and develops Chinese consumerism, marks hegemonic opportunities of a national capitalist class, suggesting how Chinese state capitalism and its Hong Kong networks limit and incrementally engage transnational capital while instantiating Hong Kong‐style consumer iconicity. New malls in mixed‐use developments in China often occupy sites of historical markets and thus affirm Sklair's prediction that iconic architecture increasingly proclaims consumer space while claiming historic forms of public space.     

Relationship between news media coverage of medical research and academic medical centers and people volunteering for clinical trials

In academic medical centers an untested assumption is that positive media attention aids recruitment of patients into a medical study while negative news reporting is damaging. In this study we examine associations between the amount of newspaper coverage concerning medical research and the number of people who volunteer, and the positive or negative content of the reporting. We find evidence that a positive relationship, though not statistically significant, exists between the volume of media coverage and volunteerism; a positive relationship exists between positive media coverage and volunteerism; and no existence of an inverse relationship between negative news coverage and volunteerism. These results lay a foundation for more in-depth exploration into the role news media play in this type of volunteerism.     

Lay people’s models of the economy: A study based on surveys of consumer sentiments

The purpose of this paper is to use a large data set comprising individual’s responses to survey questions about future economic conditions, unemployment and prices to explore lay people’s models of the economy and specifically their understanding of the relationship between unemployment and economic activity and also between unemployment and prices. The data is taken from the questionnaires used to form monthly indexes of consumer sentiments in Australia. We ask if the implied bivariate relationships are rational in the sense used by Muth (1961) and if they are consistent with the good-begets-good heuristic proposed by Leiser and Aroch (2009). We also ask if they are consistent with the actual operation of economic – and especially monetary – policy in Australia. We find that the data does provide some support for these hypotheses and for recent work in behavioural macroeconomics utilising the good-begets-good heuristic.