The 2007-2008 U.S. recession: What did the real-time google trends data tell the United States?

Tao Chen, Erin P K SO, Liang Wu, Isabel Kit Ming Yan

Research output: Contribution to journalArticlepeer-review

20 Citations (Scopus)

Abstract

In the extant literature of business cycle predictions, the signals for business cycle turning points are generally issued with a lag of at least 5 months. In this paper, we make use of a novel and timely indicator-the Google search volume data-to help to improve the timeliness of business cycle turning point identification. We identify multiple query terms to capture the real-time public concern on the aggregate economy, the credit market, and the labor market condition. We incorporate the query indices in a Markov-switching framework and successfully "nowcast" the peak date within a month that the turning occurred.

Original languageEnglish
Pages (from-to)395-403
Number of pages9
JournalContemporary Economic Policy
Volume33
Issue number2
DOIs
Publication statusPublished - 1 Apr 2015

Scopus Subject Areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Public Administration

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