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.