How Novelty and Narratives Drive the Stock Market

Black Swans, Animal Spirits and Scapegoats

Inbunden, Engelska, 2021

Av Nicholas Mangee, Nicholas (Georgia Southern University) Mangee

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'Animal spirits' is a term that describes the instincts and emotions driving human behaviour in economic settings. In recent years, this concept has been discussed in relation to the emerging field of narrative economics. When unscheduled events hit the stock market, from corporate scandals and technological breakthroughs to recessions and pandemics, relationships driving returns change in unforeseeable ways. To deal with uncertainty, investors engage in narratives which simplify the complexity of real-time, non-routine change. This book assesses the novelty-narrative hypothesis for the U.S. stock market by conducting a comprehensive investigation of unscheduled events using big data textual analysis of financial news. This important contribution to the field of narrative economics finds that major macro events and associated narratives spill over into the churning stream of corporate novelty and sub-narratives, spawning different forms of unforeseeable stock market instability.

Produktinformation

Utgivningsdatum2021-10-14
Mått158 x 235 x 29 mm
Vikt760 g
FormatInbunden
SpråkEngelska
SerieStudies in New Economic Thinking
Antal sidor300
FörlagCambridge University Press
ISBN9781108838450

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Part I. Novelty, Narratives and Instability: 1. Narrative finance and stock market novelty; 2. Unpredictably unstable; Part II. News Analytics as a Window into Stock Market Instability: 3. Narratology and other disciplines; 4. News anaytics: novelty, narratives and non-routine change; 5. The corporate Knightian uncertainty index; 6. KU Sentiment, novelty and relevance; 7. Diversity of corporate uncertainty events; 8. Macro versus micro novelty; Part III. Empirical Evidence for the Novelty-Narrative Hypothesis: 9. Corporate novelty and stock market outcomes; 10. Narrative intensity and stock market instability; 11. A manual novelty-narrative scapegoat analysis; 12. Applying novelty and narratives to other research; 13. The future of novelty, narratives and uncertainty in finance; 14. Concluding thoughts and future research; Appendices; Bibliography; Index.

'This important book completes a project begun by Keynes long before The General Theory and overthrows the standard approach to uncertainty in economics. Its study of narratives, multiple equilibria, and use of machine learning to extract the contents of narratives from financial reporting is certain to be of wide interest and is a real contribution to economics.' George Akerlof, Nobel Laureate in Economics