Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/289573 
Year of Publication: 
2024
Series/Report no.: 
ECONtribute Discussion Paper No. 287
Publisher: 
University of Bonn and University of Cologne, Reinhard Selten Institute (RSI), Bonn and Cologne
Abstract: 
The proliferation of fake news poses significant challenges for policymakers and raises concerns about its potential impact on economic stability. This paper explores this question, focusing on the macroeconomic effects of technology related fake news in the US for the period 2007-2022. Utilizing a novel dataset of fact-checked statements from PolitiFact, we construct a binary indicator to build a proxy for the exogenous variation in fake news issuance. Adopting a proxy-VAR approach, we show that technology fake news increases macroeconomic uncertainty, exacerbates unemployment, and depresses industrial production. Similar effects are observed for fake news related to the supply side, such as tax rates or the price of gas. On the contrary, fake news related to government finance, market regulation, or the labor market does not impact economic stability. Furthermore, fake news that conveys negative information about technological developments exhibits stronger depressive impacts than positive ones.
Subjects: 
Fake news
business cycle
proxy-VAR
JEL: 
C32
E32
Document Type: 
Working Paper

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