City Research Online

The Measurement of Real-Time Perceptions of Financial Stress: Implications for Political Science

Gandrud, C. & Hallerberg, M. (2017). The Measurement of Real-Time Perceptions of Financial Stress: Implications for Political Science. British Journal of Political Science, 49(4), pp. 1577-1589. doi: 10.1017/s0007123417000291

Abstract

Responding to financial market disruptions is a defining challenge for policymakers and a central topic of political research. Yet established measures of financial conditions have significant shortcomings. Annual binary crisis variables limit our ability to explore non-linear relationships and the political effects of rapidly changing conditions. Continuous indicators have their own flaws in operationalization and reproducability. We create a continuous measure of real-time perceived stress using a kernel principal component analysis (KPCA) of Economist monthly country reports. We demonstrate the usefulness of our measure by showing that it more accurately captures the effect of financial market stress levels on electoral volatility. We also show how KPCA can be used to efficiently summarize large quantities of texts into cross-sectional time-series variables.

Publication Type: Article
Additional Information: This article has been published in a revised form in British Journal of Political Science https://doi.org/10.1017/S0007123417000291. This version is free to view and download for private research and study only. Not for re-distribution, re-sale or use in derivative works. © Gandrud, C. & Hallerberg, M.
Publisher Keywords: financial crisis, economic policymaking, banking, electoral volatility, natural language processing
Departments: School of Policy & Global Affairs > International Politics
SWORD Depositor:
[thumbnail of measurement-real-time.pdf]
Preview
Text - Accepted Version
Download (704kB) | Preview

Export

Add to AnyAdd to TwitterAdd to FacebookAdd to LinkedinAdd to PinterestAdd to Email

Downloads

Downloads per month over past year

View more statistics

Actions (login required)

Admin Login Admin Login