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The interrelationship between media reports and the recession in Croatia

Author

Listed:
  • Čižmešija Mirjana

    (Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia)

  • Sorić Petar

    (Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia)

  • Lolić Ivana

    (Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia)

Abstract

This paper builds upon the Economist’s R-word (recession) index by forming a Croatian version of a media news-based economic uncertainty measure. Using the web archives of the four major Croatian news portals (Index.hr, Jutarnji list, Večernji list and 24 sata), an extensive database of as much as 531107 news articles is formed. The R-word index is obtained by calculating the monthly share of recession-related articles. This way Croatia is placed among the few rare world countries which have their own version of this index. It is found that the index is a leading indicator of economic activity in Croatia, preceding GDP growth rates by two months. Using rolling window correlations, the authors also prove that economic agents react to uncertainty shocks in the most intensive manner precisely at the onset of an economic crisis, while the correlation decreases in periods of more stable economic growth rates.

Suggested Citation

  • Čižmešija Mirjana & Sorić Petar & Lolić Ivana, 2017. "The interrelationship between media reports and the recession in Croatia," Croatian Review of Economic, Business and Social Statistics, Sciendo, vol. 3(1), pages 16-34, June.
    • Handle: RePEc:vrs:crebss:v:3:y:2017:i:1:p:16-34:n:2
    DOI: 10.1515/crebss-2017-0002
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    References listed on IDEAS

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    More about this item

    Keywords

    Business and Consumer Surveys; economic uncertainty; leading indicator; R-word index; recession;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • E03 - Macroeconomics and Monetary Economics - - General - - - Behavioral Macroeconomics

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