Seismonomics: Listening to the Heartbeat of the Economy

Abstract

Seismometers continuously record a wide range of ground vibrations that are not necessarily related to earthquake activity, but are rather caused by human activity such as industrial processes and traffic. We isolate the human‐made imprints from a huge data set made of nearly 20 years of continuously recorded seismic data in Beijing, China, and construct a new daily indicator, the Vibration Index, to forecast regional industrial production. We find that our indicator closely tracks business cycle fluctuations particularly during economic crises. Our results provide policymakers with a new tool to monitor the economy at a highly granular level.