Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Climate change poses an unprecedented challenge to the world economy and the global financial system. This paper sets out to understand and quantify the impact of climate mitigation, with a focus on climate-related news, which represents an important information source that investors use to revise their subjective assessments of climate risks. Using full-text data from Financial Times from January 2005 to March 2022, we develop machine learning-based indicators to measure risks from climate mitigation, and the direction of the risk is identified through manual labels. The documented risk premium indicates that climate mitigation news has been partially priced in the Canadian stock market. More specifically, stock prices react positively to market-wide climate-favorable news but they do not react negatively to climate-unfavorable news. The results are robust to different model specifications and across equity markets.

Macroeconomics --- Economics: General --- Environmental Economics --- Environmental Policy --- Industries: Energy --- Finance: General --- Portfolio Choice --- Investment Decisions --- Climate --- Natural Disasters and Their Management --- Global Warming --- Environmental Economics: Government Policy --- Nonrenewable Resources and Conservation: General --- Price Level --- Inflation --- Deflation --- General Financial Markets: General (includes Measurement and Data) --- Economic & financial crises & disasters --- Economics of specific sectors --- Climate change --- Environmental policy & protocols --- Petroleum, oil & gas industries --- Finance --- Environment --- Climate policy --- Oil sector --- Economic sectors --- Asset prices --- Prices --- Currency crises --- Informal sector --- Economics --- Climatic changes --- Environmental policy --- Petroleum industry and trade --- Stock exchanges

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Climate change poses an unprecedented challenge to the world economy and the global financial system. This paper sets out to understand and quantify the impact of climate mitigation, with a focus on climate-related news, which represents an important information source that investors use to revise their subjective assessments of climate risks. Using full-text data from Financial Times from January 2005 to March 2022, we develop machine learning-based indicators to measure risks from climate mitigation, and the direction of the risk is identified through manual labels. The documented risk premium indicates that climate mitigation news has been partially priced in the Canadian stock market. More specifically, stock prices react positively to market-wide climate-favorable news but they do not react negatively to climate-unfavorable news. The results are robust to different model specifications and across equity markets.

Macroeconomics --- Economics: General --- Environmental Economics --- Environmental Policy --- Industries: Energy --- Finance: General --- Portfolio Choice --- Investment Decisions --- Climate --- Natural Disasters and Their Management --- Global Warming --- Environmental Economics: Government Policy --- Nonrenewable Resources and Conservation: General --- Price Level --- Inflation --- Deflation --- General Financial Markets: General (includes Measurement and Data) --- Economic & financial crises & disasters --- Economics of specific sectors --- Climate change --- Environmental policy & protocols --- Petroleum, oil & gas industries --- Finance --- Environment --- Climate policy --- Oil sector --- Economic sectors --- Asset prices --- Prices --- Currency crises --- Informal sector --- Economics --- Climatic changes --- Environmental policy --- Petroleum industry and trade --- Stock exchanges

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

We construct sentiment indices for 20 countries from 1980 to 2019. Relying on computational text analysis, we capture specific language like “fear”, “risk”, “hedging”, “opinion”, and, “crisis”, as well as “positive” and “negative” sentiments, in news articles from the Financial Times. We assess the performance of our sentiment indices as “news-based” early warning indicators (EWIs) for financial crises. We find that sentiment indices spike and/or trend up ahead of financial crises.

Financial crises. --- Economic indicators. --- Business indicators --- Economic indicators --- Indicators, Business --- Indicators, Economic --- Leading indicators --- Economic history --- Quality of life --- Economic forecasting --- Index numbers (Economics) --- Social indicators --- Crashes, Financial --- Crises, Financial --- Financial crashes --- Financial panics --- Panics (Finance) --- Stock exchange crashes --- Stock market panics --- Crises --- Banks and Banking --- Financial Risk Management --- Macroeconomics --- Prices, Business Fluctuations, and Cycles: Forecasting and Simulation --- Financial Markets and the Macroeconomy --- General Outlook and Conditions --- International Finance: General --- Information, Knowledge, and Uncertainty: General --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Financial Crises --- Economic & financial crises & disasters --- Financial services law & regulation --- Early warning systems --- Financial crises --- Hedging --- Global financial crisis of 2008-2009 --- Banking crises --- Financial regulation and supervision --- Crisis management --- Financial risk management --- Global Financial Crisis, 2008-2009 --- Turkey

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper applies state-of-the-art deep learning techniques to develop the first sentiment index measuring member countries’ reception of IMF policy advice at the time of Article IV Consultations. This paper finds that while authorities of member countries largely agree with Fund advice, there is variation across country size, external openness, policy sectors and their assessed riskiness, political systems, and commodity export intensity. The paper also looks at how sentiment changes during and after a financial arrangement or program with the Fund, as well as when a country receives IMF technical assistance. The results shed light on key aspects on Fund surveillance while redefining how the IMF can view its relevance, value added, and traction with its member countries.

Canada --- Finance: General --- Macroeconomics --- Industries: Financial Services --- Intelligence (AI) & Semantics --- International Monetary Arrangements and Institutions --- International Policy Coordination and Transmission --- Data Collection and Data Estimation Methodology --- Computer Programs: Other Computer Software --- Commodity Markets --- General Financial Markets: Government Policy and Regulation --- Technological Change: Choices and Consequences --- Diffusion Processes --- Financial Institutions and Services: General --- Finance --- Machine learning --- Commodity price fluctuations --- Financial Sector Assessment Program --- Financial sector --- Commodity prices --- Prices --- Technology --- Economic sectors --- Financial sector policy and analysis --- Financial services industry

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

In recent years, Fund staff has prepared cross-country analyses of macroeconomic vulnerabilities in low-income countries, focusing on the risk of sharp declines in economic growth and of debt distress. We discuss routes to broadening this focus by adding several macroeconomic and macrofinancial vulnerability concepts. The associated early warning systems draw on advances in predictive modeling.

Central African Republic --- Business and Economics --- Macroeconomics --- Economics: General --- International Economics --- Financial Risk Management --- Inflation --- Banks and Banking --- Forecasting and Other Model Applications --- Monetary Policy --- Financial Crises --- Macroeconomic Analyses of Economic Development --- Business Fluctuations --- Cycles --- Price Level --- Deflation --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Commodity Markets --- Economic & financial crises & disasters --- Economics of specific sectors --- Financial crises --- Economic sectors --- Prices --- Banking crises --- Early warning systems --- Commodity prices --- Currency crises --- Informal sector --- Economics --- Crisis management