Soft information and economic activity: Evidence from the Beige Book

Shibley Sadique, Francis Haeuck In, Madhu Veeraraghavan, Paul Wachtel

    Research output: Contribution to journalArticleResearchpeer-review

    6 Citations (Scopus)


    This study employs text-analysis software to analyze the contents of the Federal Reserve Beige Book summary of national economic and business conditions, with a particular focus on the predictive content of the text. We show that the Beige Book language is a good predictor of economic turning points as it often provides an early indication of future economic activities. During economic upswings, positive tone becomes more prominent and negative tone becomes less prominent. In addition, this study is the first to document that Beige Book tone affects stock market volatility and trading volume.
    Original languageEnglish
    Pages (from-to)81 - 92
    Number of pages12
    JournalJournal of Macroeconomics
    Publication statusPublished - 2013

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