In Search of Information [electronic resource] : Use of Google Trends' Data to Narrow Information Gaps for Low-income Developing Countries / Futoshi Narita.
Material type: TextSeries: IMF Working Papers; Working Paper ; No. 18/286Publication details: Washington, D.C. : International Monetary Fund, 2018Description: 1 online resource (51 p.)ISBN: 1484390172 :Subject(s): Comparative Studies Of Countries | Forecasting And Simulation | Macroeconomic Analyses Of Economic Development | Measurement Of Economic Growth | Trade Forecasting And SimulationAdditional physical formats: Print Version:: In Search of Information: Use of Google Trends' Data to Narrow Information Gaps for Low-income Developing CountriesOnline resources: IMF e-Library | IMF Book Store Abstract: 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.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.
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