Levi Boxell, 01 October 2017

The internet has received a substantial amount of blame for the recent increase in political polarisation. Using US data, this column argues that, in fact, the internet has played no significant role in a generally increasing trend of political polarisation that goes back at least to the 1970s. The results highlight the importance of looking beyond convenient narrative explanations, and the need for a deeper understanding of the drivers of political sentiment.

Julia Cagé, Nicolas Hervé, Marie-Luce Viaud, 19 June 2017

The rise of news consumption through social media and the ‘fake news’ phenomenon has raised doubt over the value of original news production. This column uses a comprehensive dataset of French news content produced in 2013 to assess the commercial returns to original news production. It finds that media outlets with a larger fraction of original content do tend to receive greater audiences.

Vahid Gholampour, Eric van Wincoop, 15 May 2017

Large numbers of traders share their thoughts about the euro-dollar exchange rate on Twitter. By identifying and classifying opinionated tweets, and constructing a daily measure of sentiment, this column shows that a trading strategy that takes long or short positions based on the forecasts of high-follower accounts provides a Sharpe ratio significantly above that of the carry trade. The methodology could easily be applied to other currencies or portfolios of currencies, as well as other financial markets such as the stock market.

Maria Petrova, Ananya Sen, Pinar Yildirim, 28 February 2017

New communication technologies change the way people become informed and stay connected, and can also change voter behaviour. This column uses a dataset covering 1,814 candidates for the US Senate with Twitter accounts to analyse how using a new social media technology can overcome the barriers of communicating with voters. Candidates receive more campaign donations after they join Twitter, but adopting the technology seems to help only new, inexperienced politicians. This suggests that new technologies can ease entry to politics for new candidates and promote political competition.

Ruben Enikolopov, Maria Petrova, Konstantin Sonin, 20 June 2016

In addition to the traditional mass media, social media has become a channel through which citizens can hold public officials and corporate leaders to account. But social media commentators can be vulnerable to manipulation and reputational damage. This column uses data on a popular blogger in Russia to show that blogs are critical of corruption in state-controlled companies can lead to decreased profit diversion and corruption by the targeted companies. Social media appears to play an important role in improving accountability, particularly when traditional media is censored or political competition is limited.

Igal Hendel, Saul Lach, Yossi Spiegel, 19 June 2015

It is well-documented that social media is an enabler of mass protests. Social media-led protests and how they interact with the economy are, however, less well-understood. This column focusses on boycotts of cottage cheese (a staple food) in Israel as a protest against increased prices and finds that firms seem to react to these threats and set prices not only on the basis of demand elasticities, as traditional analysis in industrial organisation assumes, but also on the basis of the business environment – something which is not easily captured by traditional analysis.

Events