In Search of Information: Use of Google Trends’ Data to Narrow Information Gaps for Low-income Developing Countries
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Summary:
Timely data availability is a long-standing challenge in policy-making and analysis for low-income developing countries. This paper explores the use of Google Trends’ data to narrow such information gaps and finds that online search frequencies about a country significantly correlate with macroeconomic variables (e.g., real GDP, inflation, capital flows), conditional on other covariates. The correlation with real GDP is stronger than that of nighttime lights, whereas the opposite is found for emerging market economies. The search frequencies also improve out-of-sample forecasting performance albeit slightly, demonstrating their potential to facilitate timely assessments of economic conditions in low-income developing countries.
Series:
Working Paper No. 2018/286
Subject:
Asset prices Exchange rates Foreign exchange Inflation Labor Prices Real effective exchange rates Unemployment rate
English
Publication Date:
December 14, 2018
ISBN/ISSN:
9781484390177/1018-5941
Stock No:
WPIEA2018286
Pages:
51
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