Media Tone : The Role of News and Social Media on Heterogeneous Inflation Expectations

Abstract
This study investigates the role of media tone on inflation expectations. Examining the relationships between news and the inflation expectations of various US demographic groupings, we find that traditional news influences older cohorts, whereas social media news align more closely with the expectations of younger and more educated groups. Interestingly, social media correspond more closely than traditional news with the expectations of professional forecasters. Our analysis shows that media influences can persist for longer than a year, highlighting the importance of historical inflation data and the gradual adaptation of new information. Additionally, we find that separate media tones for specific news topics such as “Inflation & Fed” and “Healthcare Costs” resonate differently across demographic groups. These insights highlight the nuanced role of media in shaping inflation expectations across demographic segments.
Main Authors
Format
Articles Research article
Published
2024
Series
Subjects
Publication in research information system
Publisher
Wiley
The permanent address of the publication
https://urn.fi/URN:NBN:fi:jyu-202411277475Use this for linking
Review status
Peer reviewed
ISSN
0277-6693
DOI
https://doi.org/10.1002/for.3225
Language
English
Published in
Journal of Forecasting
Citation
  • Heikkinen, J., & Heimonen, K. (2024). Media Tone : The Role of News and Social Media on Heterogeneous Inflation Expectations. Journal of Forecasting, Early View. https://doi.org/10.1002/for.3225
License
CC BY 4.0Open Access
Additional information about funding
The JyIMaFresearch group is thankful for the OP Group Research Foundation's financial support. Mr. Heikkinen is also grateful to the Finnish Cultural Foundation, the Jenny & Antti Wihuri Foundation, the Yrjö Jahnsson Foundation, and Jyväskylän yliopisto for their financial support.
Copyright© 2024 The Author(s). Journal of Forecasting published by John Wiley & Sons Ltd.

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