Series: Working Papers. 2027.
Author: Pablo Aguilar, Corinna Ghirelli, Matías Pacce and Alberto Urtasun.
Published in: Economic Letters, Volume 199, February 2021, 109730
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Abstract
We construct a new newspaper-based sentiment indicator for Spain that allows us to
monitor Spanish economic activity in real-time. As opposed to the traditional surveybased
confidence indicators that are released at the end of the month, our indicator can
be constructed on a daily basis and updated in real-time. We compare our proposed
index with the popular Economic Sentiment Indicator of the European Commission,
and we show that ours performs significantly better in nowcasting the Spanish GDP.
In addition, our indicator proves to be helpful in order to predict the current COVID-19
recession from an earlier date. All in all, our indicator performs similarly to or even
outperforms other soft indicators, with the advantage of being updated daily. Thus, it
provides a valuable option when measuring the confidence in the economy.