NEWS The aim of Nationalekonomiska föreningen (Swedish Economic Association) is to award a prize each year for the best master’s thesis on the subject of Economics written by a student at Umeå University. The prize was awarded December 1 in 2022 in connection with the seminar held by Nationalekonomiska föreningen.
Winner Suess Severin.
ImagePrivatThe winner was Suess Severin for his thesis with the title "Forward Guidance Through Newspaper Articles - Explaining Movement in Bond Yields Through Text Analysis".
He was awarded a scholarship of 10,000 SEK.
Comments from the jury: It is of great importance, in many aspects, to be able to interpret information correctly. This is especially true for the financial markets, in terms of interpreting the statements of financial and public actors.
The Swedish central bank aims to provide as correct and easily interpreted information as possible with regards to the financial and monetary situation in Sweden, and the world, to reduce uncertainties.
However, it isn’t reasonable to assume that financial actors use the information provided by the Swedish central bank alone as foundation for their financial decisions. It is more reasonable to assume that they collect information from several different sources, such as newspapers, in their attempt to predict the potential yield from bonds in the future. Further, newspapers may not necessarily be as precise in their statements as the Swedish central bank, implying that actors could misinterpret the information provided to them.
In this paper, Severin Suess investigates (through text mining) whether the Swedish newspapers interpretation (and "translation") of the information from the Swedish central bank can predict future bond yields. The results from the model imply that the model in fact can predict the return in the short run, but preforms worse for long run predictions.
The author demonstrate the ability to apply his theoretical understanding to advanced econometric settings to test relevant hypotheses. The thesis is innovative, well-written, and shows that there is great potential to conduct impactful and insightful research through the rather novel approach of text mining.