Newspaper text can improve growth forecasts – DNB research

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The use of a sentiment index based on positive and negative words in newspaper articles can improve the accuracy of short-term growth forecasts, research by the Netherlands Bank (DNB) finds.

The index is based on around one million articles taken from the Dutch financial newspaper Het Financieele Dagblad, spanning the period from 1985 to 2020. The sentiment indicator closely tracks real GDP growth. When integrated into growth forecasts, it can cut error terms by 10–15%, DNB says.

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