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From Buzz to Bust: How Fake news Shapes the Business Cycle

Author

Listed:
  • Tiziana Assenza

    (Toulouse School of Economics)

  • Fabrice Collard

    (Toulouse School of Economics)

  • Patrick Fève

    (Toulouse School of Economics)

  • Stefanie J. Huber

    (University of Bonn)

Abstract

The threats that misinformation poses to politics and public health are well documented, but the macroeconomic effects of fake news remain largely unexplored. This column highlights insights from recent research on the impact of fake news on economic stability. Leveraging a novel dataset, our study unveils the detrimental effects of technology-related fake news on key economic indicators. Fake news profoundly influences economic dynamics, from heightened uncertainty to amplified business cycle fluctuations. Moreover, nuanced differences in the economic response to various types of fake news underscore the complexity of the challenge. As policymakers grapple with the ramifications of fake news, our research suggests that they should pay attention to its effects on economic stability.

Suggested Citation

  • Tiziana Assenza & Fabrice Collard & Patrick Fève & Stefanie J. Huber, 2024. "From Buzz to Bust: How Fake news Shapes the Business Cycle," ECONtribute Policy Brief Series 058, University of Bonn and University of Cologne, Germany.
    • Handle: RePEc:ajk:ajkpbs:058
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Fake news; business cycle; proxy-VAR;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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