In Search of Information: Use of Google Trends’ Data to Narrow Information Gaps for Low-income Developing Countries

December 14, 2018

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Futoshi Narita, and Rujun Yin. In Search of Information: Use of Google Trends’ Data to Narrow Information Gaps for Low-income Developing Countries, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Timely data availability is a long-standing challenge in policy-making and analysis for low-income developing countries. This paper explores the use of Google Trends’ data to narrow such information gaps and finds that online search frequencies about a country significantly correlate with macroeconomic variables (e.g., real GDP, inflation, capital flows), conditional on other covariates. The correlation with real GDP is stronger than that of nighttime lights, whereas the opposite is found for emerging market economies. The search frequencies also improve out-of-sample forecasting performance albeit slightly, demonstrating their potential to facilitate timely assessments of economic conditions in low-income developing countries.

Subject: Asset prices, Exchange rates, Foreign exchange, Inflation, Labor, Prices, Real effective exchange rates, Unemployment rate

Keywords: Asset prices, Capital flows, Economic growth, Exchange rate, Exchange rates, Finance SVI, Global, Google search volume index, Google's SVI, Government SVI, Health SVI, Inflation, Low-income developing countries, Nighttime lights, Nominal exchange rate, Nowcasting, Real effective exchange rates, Short-term forecasting, Travel SVI, Unemployment rate, WP

Publication Details

Pages:

51
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/286
Stock No:

WPIEA2018286
ISBN:

9781484390177
ISSN:

1018-5941

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