Narrative fragmentation and the business cycle

COVID risk narratives: a computational linguistic approach to the econometric identification of narrative risk during a pandemic

“…( 2021 ) and Bertsch et al. ( 2021 ). Shiller ( 2019 ) does not provide explicit models for the role of narratives in economic contexts, but Eliaz and Spiegler ( 2020 ) use directed acyclic graph (DAGs) to describe a narrative as a causal model that maps actions into consequences.…”

“…Bertsch et al. ( 2021 ) find that narratives tend to fragment into competing explanations during contractions. Thus, fourth, we expect the narrative consensus to decrease around the severe market declines.…”

“…Bertsch et al. ( 2021 ) characterize the properties of narratives over business cycles and find that narratives tend to consolidate during expansion periods and tend to fragment during contractions. All the empirical analysis on narratives mentioned here rely on natural language processing tools.…”

“…( 2003 ), Bertsch et al. ( 2021 ) and Larsen et al. ( 2021 )], semantic meaning analysis [such as Mikolov et al.…”

“…Recent narrative papers in economics and finance started formalizing the research methods [see a survey by Grimmer and Stewart ( 2013 )], theoretical grounds [e.g., Eliaz and Spiegler ( 2020 )] and stylized facts [e.g., Bertsch et al. ( 2021 ) and Nyman et al. ( 2021 )].…”