Composite indicators (or indexes) are very common in economic and business statistics for benchmarking the mutual and relative progress of countries in a variety of policy domains such as industrial competitiveness, sustainable development, globalization and innovation. The proliferation of the production of composite indicators by all the major international organizations is a clear symptom of their political importance and operational relevance in policy-making. As a consequence, improvements in the way these indicators are constructed and used seem to be a very important research issue from both the theoretical and operational points of view. This article aims at contributing to the improvement of the overall quality of composite indicators (or indexes) by looking at one of their technical weaknesses, that is, the aggregation convention used for their construction. For this aim, we build upon concepts coming from multi-criteria decision analysis, measurement theory and social choice. We start from the analysis of the axiomatic system underlying the mathematical modelling commonly used to construct composite indicators. Then a different methodological framework, based on noncompensatory/nonlinear aggregation rules, is developed. Main features of the proposed approach are: (i) the axiomatic system is made completely explicit and (ii) the sources of technical uncertainty and imprecise assessment are reduced to the minimum possible degree.

Abstract.  Data obtained from business and consumer surveys are often used in forecasting models and in testing different expectation formation schemes. Their use, however, requires a previous step of transformation of the qualitative data into quantitative figures. This paper contains a critical review of the different quantification methods, highlighting the limits of their use in macroeconomic modelling.

Abstract. 'A blindfolded chimpanzee throwing darts at The Wall Street Journal could select a portfolio that would do as well as the (stock market) experts ' [Malkiel (2003) The efficient market hypothesis and its critics. Journal of Economic Perspectives 17(1): 59-82)]. However, what if this chimpanzee could browse the Internet before throwing any darts? In this paper, we ask whether online news has any influence on the financial market, and we also investigate how much influence it has. We explore the burgeoning literature on the predictability of financial movements using online information and report its mixed findings. In addition, we collate the efforts of various disciplines, including economics, text mining, sentiment analysis and machine learning, and we offer suggestions for future research.

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This publication is a Technical report by the Joint Research Centre (JRC), the European Commission's science and knowledge service. It aims to provide evidence-based scientific support to the European policymaking process. The scientific output expressed does not imply a policy position of the European Commission. Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use that might be made of this publication.