Asymmetric Perceptions of the Economy: Media, Firms, Consumers, and Experts

This article sheds light on the interaction of media, economic actors, and economic experts. Based on a unique data set of 86,000 news items rated by professional analysts of Media Tenor International and survey data, we first analyze the overall tone of the media, consumers', firms', and economic experts' opinions on the state and outlook of the economy. Second, we assess the protagonist's ability at correctly predicting GDP. Third, we use Granger causality tests to uncover who is influencing whom when it comes to the formation of opinions on the economy. We find that media reports have a significant negative bias. The economic sentiment of the media, consumers and firms does not reflect the actual situation. Finally, we find that media sentiment is not influenced by any other actor. In contrast, media appear to affect all other actors

The Role of Media for Inflation Forecast Disagreement of Households and Professional Forecasters

This paper investigates the effects of media coverage and macroeconomic conditions on inflation forecast disagreement of German households and professional forecasters. We adopt a Bayesian learning model in which media coverage of inflation affects forecast disagreement by influencing information sets as well as predictor choice. Our empirical results show that disagreement of households depends on the content of news stories (tone) but is unaffected by reporting intensity (volume) and by the heterogeneity of story content (information entropy). Disagreement of professionals does not depend on media coverage. With respect to the influence of macroeconomic variables we provide evidence that disagreement of households and professionals primarily depends on the current rate of inflation

Job Loss Fears and (Extreme) Party Identification: First Evidence from Panel Data

There is a large body of literature analyzing the relationship between objective economic conditions and voting behavior, but there is very little evidence of how perceived economic insecurity impacts on political preferences. Using seventeen years of household panel data from the German Socio-Economic Panel, we examine whether job loss fears impact on individuals' party identification. Consistent with rational choice theory, we find strong and robust evidence that job loss fears foster affinity for parties at the far right-wing of the political spectrum. However, our empirical estimates do not suggest that job loss fears result in people withdrawing their support from political parties altogether

Relative political and value proximity in mediated public diplomacy: The effect of state-level homophily on international frame building

This article applies the homophily thesis to public diplomacy and offers an empirical examination of a country's success in its mediated public diplomacy efforts. It analyzes international frame building, the process of creating or changing media frames in the international communications arena, by applying it to the case of Israeli mediated public diplomacy efforts during the war in Gaza in the winter of 2008-2009. The article claims that one way to use the homophily thesis in empirical analyses of international frame-building campaigns in conflicts is to measure the political and value proximity of a country promoting frames to other countries. Yet, proximity should be measured relatively rather than in absolute terms. Therefore, one should look not only at the dyadic proximity between two actors (i.e., Country A that attempts to promote its frames to Country C), but at the relative proximity between Countries A and C considering the proximity between the rival Country B and the target Country C. The study proposes a model and a method to facilitate empirical analysis of this claim. Using sophisticated computerized content analysis, our analyses demonstrate that relative proximity is related to successful international frame building in the hypothesized direction: The closer the relative proximity between Israel and a foreign country, the greater the acceptance of Israel's views. © 2014 Copyright Taylor and Francis Group, LLC

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