IDEAS home Printed from https://ideas.repec.org/a/taf/cnpexx/v26y2021i4p616-630.html
   My bibliography  Save this article

Daily Judgement: Political News and Financial Markets

Author

Listed:
  • Michael Breen
  • Iain McMenamin
  • Michael Courtney
  • Gemma McNulty

Abstract

Political economists disagree about the extent to which markets monitor politics in advanced economies. Some argue that investors are interested in a handful of macroeconomic indicators, while others say that markets also watch political competition closely. We argue that political competition drives variation in the government bond market more than information about economic policy. Using a new automatic classifier, we code the content of millions of newspaper paragraphs about the UK from 1986 to 2012. We then test the impact of news on government debt. We find that political news is correlated with bond prices and that macroeconomic policy news is not. Our results suggest that the market passes daily judgement on politics, not merely cleaving to seldom-released official statistics or focusing on occasional events like elections.

Suggested Citation

  • Michael Breen & Iain McMenamin & Michael Courtney & Gemma McNulty, 2021. "Daily Judgement: Political News and Financial Markets," New Political Economy, Taylor & Francis Journals, vol. 26(4), pages 616-630, July.
    • Handle: RePEc:taf:cnpexx:v:26:y:2021:i:4:p:616-630
    DOI: 10.1080/13563467.2020.1806221
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13563467.2020.1806221
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13563467.2020.1806221?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jan Libich & Liam Lenten, 2022. "Hero or villain? The financial system in the 21st century," Journal of Economic Surveys, Wiley Blackwell, vol. 36(1), pages 3-40, February.
    2. Ghalke, Avinash & Sensarma, Rudra & Chakraborty, Sandip & Kakani, Ram Kumar, 2023. "Stock markets and economic uncertainty: Roles of legislative sessions and coalition strength," European Journal of Political Economy, Elsevier, vol. 78(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:cnpexx:v:26:y:2021:i:4:p:616-630. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/cnpe20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.