Reform chatter and democracy

Arezki, Rabah, Djankov, Simeon, Nguyenc, Ha and Yotzov, Ivan (2020) Reform chatter and democracy. Financial Markets Group Discussion Papers (810). Financial Markets Group, The London School of Economics and Political Science, London, UK.

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Abstract

We explore the dynamics of media chatter about economic reforms using text analysis from about a billion newspaper articles in 28 languages. We show that the intensity of reform chatter increases during economic downturns. This increase is more significant in democracies. Using instrumental variable techniques, we find the relationship to be causal. We also document that reform chatter is followed by actual reforms, suggesting that democracies benefit from a "self- correcting" mechanism stemming from changing popular attitudes towards reform.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://www.fmg.ac.uk/
Additional Information:	© 2020 The Authors
Divisions:	Financial Markets Group
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HG Finance
JEL classification:	P - Economic Systems > P1 - Capitalist Systems > P10 - General P - Economic Systems > P4 - Other Economic Systems > P40 - General D - Microeconomics > D7 - Analysis of Collective Decision-Making > D70 - General E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E30 - General
Date Deposited:	23 May 2023 23:04
Last Modified:	16 Sep 2023 00:00
URI:	http://eprints.lse.ac.uk/id/eprint/118883

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