partisan bias in economic news evidence on the agenda setting behavior of u s newspapers abstract we study the agenda setting political behavior of a large sample of u s newspapers during the 1996 2005 period our purpose is to examine the intensity of coverage of economic issues as a function of the underlying economic conditions and the political affiliation of the incumbent president focusing on unemployment inflation the federal budget and the trade deficit we investigate whether there is any significant correlation between the endorsement policy of newspapers and the differential coverage of bad good economic news as a function of the president s political affiliation we find evidence that newspapers with pro democratic endorsement pattern systematically give more coverage to high unemployment when the incumbent president is a republican than when the president is democratic compared to newspapers with pro republican endorsement pattern this result is robust to controlling for the partisanship of readers we find similar but less robust results for the trade deficit we also find some evidence that newspapers cater to the partisan tastes of readers in the coverage of the budget deficit we find no evidence of a partisan bias or at least of a bias that is correlated with the endorsement or reader partisanship for stories on inflation

does informative media commentary reduce politicians incentives to pander abstract elections sometimes give policy makers incentives to pander i e to implement a policy that voters think is in their best interest even though the policy maker knows that a different policy is actually better for the voters pandering incentives are typically attenuated when voters learn prior to the election whether the policy chosen by the incumbent truly was in their best interest this suggests that the media can improve accountability by reporting to voters information about whether an incumbent made good policy choices we show that although media monitoring does sometimes eliminate the incumbent s incentive to pander in other cases it makes the problem of pandering worse furthermore in some circumstances incumbent incentives are improved when the media acts as a yes man suppressing some information that indicates the policy maker made the wrong choice we explain these seemingly paradoxical results by focusing on how media commentary affects voters tendency to apply an asymmetric burden of proof to the incumbent based on whether she pursues popular or unpopular policies

media scrutiny and the quality of public officials i investigate whether attempts by the media to determine a candidate s fitness for office lowers the average quality of public officials what i call the media scrutiny paradox media scrutiny imperfectly signals heterogeneous candidates type but imposes privacy costs and reputational costs on politicians the quality of office holders falls if the selection effect is adverse and outweighs the screening effect a low quality information signal which could result if the media focus on irrelevant aspects of behavior makes the screening effect small and the media paradox more likely to hold individuals of good character might invest more in their reputation and have more at stake from being falsely identified as a rapscallion the actual malice standard established in new york times v sullivan likely increased relatively the cost of candidacy for good people and lowered the quality of officials

exposure to chinese imports and media slant evidence from 147 u s local newspapers over 1998 2012 abstract does the recent surge in chinese imports affect the media slant against china in the united states using a data set of 147 u s local newspapers over 1998 2012 this paper shows that newspapers whose circulation counties face greater exposure to chinese imports report more negative news about china and are more likely to endorse democrats the results hold with two identification strategies and three measures of media slant the paper further shows that in u s house and senate elections between 2000 and 2012 media slant is associated with increased voting shares for democrats who are traditionally champions for the poor and critical of globalization

tapping the supercomputer under your desk solving dynamic equilibrium models with graphics processors this paper shows how to build algorithms that use graphics processing units gpus installed in most modern computers to solve dynamic equilibrium models in economics in particular we rely on the compute unified device architecture cuda of nvidia gpus we illustrate the power of the approach by solving a simple real business cycle model with value function iteration we document improvements in speed of around 200 times and suggest that even further gains are likely

compositional effects of government spending in a two country two sector production model abstract we employ a two country two sector two period heckscher ohlin model to analyze the production side channels through which a change in the composition of government spending in one country affects real exchange rates rental rates and current account balances throughout the world with one traded and one non traded consumption good the model highlights the way in which the world capital stock reshuffles internationally in response to changes in the composition of government spending these international capital flows correspond to temporary current account imbalances and serve as the transmission mechanism linking real exchange rate changes at home and abroad

media competition and electoral politics we build a framework linking competition in the media market to political participation media outlets report on the ability of candidates running for office and compete for audience through their choice of slant citizens consume news only if the expected utility of being informed about candidates ability is sufficiently large for their group collectively our results can reconcile seemingly contradictory empirical evidence showing that entry in the media market can either increase or decrease turnout while information pushes up independent turnout partisans adjust their turnout to the ability of their preferred candidate and on average they vote less when informed

investment the current account and the relative price of non traded goods in a small open economy abstract this paper incorporates traded and non traded investment expenditure into an infinite horizon setting with optimizing economic agents extending previous research that has incorporated traded and non traded investment into a two period setting the paper analyzes the dynamic adjustment of the relative price of non traded output the market price of capital and the current account following exogenous shocks to the system the exogenous shocks considered by the paper include permanent transitory and anticipated changes in an income tax and an investment subsidy as well as changes in the level of government purchases of traded and non traded output

media bias and influence evidence from newspaper endorsements this paper investigates the relationship between media bias and the inuence of the media on voting in the context of newspaper endorsements werst develop a simple econometric model in which voters choose candidates under uncertainty and rely on endorsements from better informed sources newspapers are potentially biased in favor of one of the candidates and voters thus rationally ac count for the credibility of any endorsements our primary empiricalnding is that endorsements are inuential in the sense that voters are more likely to support the recommended candidate after publication of the endorsement the degree of this inuence however depends upon the credibility of the endorsement in this way endorsements for the democratic candidate from left leaning news papers are less inuential than are endorsements from neutral or right leaning or newspapers and likewise for endorsements for the republican thesendings suggest that voters do rely on the media for information during campaigns but that the extent of this reliance depends upon the degree and direction of any bias

meaning and credibility in cheap talk games i define neologism proofness a refinement of perfect bayesian equilibrium in cheap talk games it applies when players have a preexisting common language so that an unexpected message s literal meaning is clear and only credibility restricts communication i show that certain implausible equilibria are not neologism proof in some games no equilibrium is journal of economic literature classification numbers d83 d82 c73

political economy of public policies insights from distortions to agricultural and food markets the agricultural and food sector is an ideal case for investigating the political economy of public policies many of the policy developments in this sector since the 1950s have been sudden and transformational while others have been gradual but persistent this paper reviews and synthesizes the literature on trends and fluctuations in market distortions and the political economy explanations that have been advanced based on a rich global data set covering a half century of evidence on commodities countries and policy instruments the paper identifies hypotheses that have been explored in the literature on the extent of market distortions and the conditions under which reform may be feasible

mass media instrumental information and electoral accountability journalism is widely believed to be crucial for holding elected officials accountable at the same time economic theory has a hard time providing an instrumental explanation for the existence of accountability journalism according to the common downsian reasoning rational voters should not be willing to pay for information out of purely instrumental motives because the individual probabilities of casting the decisive vote are typically very low we show that this rationale does not apply when a group of voters shares a common goal such as accountability and information is delivered via mass media in contrast to the pessimistic downsian view rational voters can have a considerable willingness to pay for the provision of instrumental information in these scenarios our model thus reconciles the rational voter approach with the common perception of journalism as a watchdog that holds elected officials accountable

technological heterogeneity and corporate investment we propose an importance sampling procedure to improve the computational performance of the simulated method of moments smm for the estimation of structural models with fixed parameter heterogeneity the main advantage of the procedure is that it does not require to simulate observations every time that the structural parameters change during the minimization of the smm criterion function we illustrate the use of our method by estimating a neoclassical model of investment for a sample of us manufacturing companies allowing the technological parameters to vary across firms

coarse thinking and persuasion we present a model of uninformative persuasion in which individuals think coarsely they group situations into categories and apply the same model of inference to all situations within a category coarse thinking exhibits two features that persuaders take advantage of i transference whereby individuals transfer the informational content of a given message from situations in a category where it is useful to those where it is not and ii framing whereby objectively useless information influences individuals choice of category the model sheds light on uninformative advertising and product branding as well as on some otherwise anomalous evidence on mutual fund advertising

a theory of credibility this paper presents models in which one agent must decide whether to trust another whose motives are uncertain reliability can only be communicated through actions in this context it pays for people to build a reputation based on reliable behaviour someone becomes credible by consistently providing accurate and valuable information or by performing useful services the theory provides a justification for long term arrangements without binding contracts it also describes those situations where it pays an agent to cash in on his reputation many decisions depend on trusting someone consumers must decide whether to believe advertisements banks need to judge the reliability of loan applicants and employers must decide how much responsibility to delegate to their employees this paper attempts to model situations that arise when someone is uncertain about whether to trust the people he deals with in this context reputations for reliability are valuable an agent becomes credible by consistently providing accurate valuable information or by always acting responsibly i analyse a series of simple abstract models of information transmission in the basic model there are two agents the sender s and the receiver r who are to play the game a known finite number of times at each stage both players learn the value of a parameter measuring the importance of that period s play of the game that is the value of making a correct decision and s obtains payoff relevant information s then sends a signal to r who makes a decision that affects the welfare of both players after both players learn the consequences of r s decision the process repeats at each stage r must decide what action to take in order to do that he must assess the credibility of s the difficulty arises because r is uncertain about s s preferences when play begins i model this by assuming that with positive probability s has identical preferences to r s is a friend and with positive probability s has completely opposed preferences to r s is an enemy this uncertainty creates a trade off for enemy senders at each stage providing honest information enhances s s reputation but only at the expense of foregoing an opportunity for immediate gain by duping r the possibility that s is a friend lends credibility to what he says but this credibility may also be exploited by an enemy s the principal equilibrium has the following form in the basic model where s has no control over the importance of a given play s typically conveys accurate information for the first several periods r raises the probability he places on s being friendly after receiving accurate information if he believes that an enemy would have lied to him with positive probability the more important the information the more likely an enemy will attempt to deceive r an enemy will eventually take advantage of r by misleading him when this happens the sender loses all opportunities for deception in the future i

independent auditors bias and political agency abstract this paper analyzes political agency with endogenous information collection and revelation by third party auditors while increasing incentives for auditors to provide information straightforwardly improves political control a small amount of pro incumbent bias can also be useful for maintaining high levels of control when the equilibrium level of control is high most investigations uncover positive information about the incumbent since positive information increases reelection rates mildly pro incumbent auditors are willing to work harder than unbiased auditors in these equilibria for moderate levels of control pro incumbent auditors are again useful due to their extra effort even though they may suppress some negative information in equilibrium only when market incentives are low so equilibrium control is weak are unbiased or anti incumbent biased auditors better for voters than mildly pro incumbent auditors

persistent media bias abstract the news media plays an essential role in society but surveys indicate that the public views the media as biased this paper presents a theory of media bias that originates with private information obtained by journalists through their investigations and persists despite profit maximizing news organizations and rivalry from other news organizations bias has two effects on the demand for news first rational individuals are more skeptical of potentially biased news and thus rely less on it in their decision making this skepticism reduces demand and leads the news organization to set a lower price for its publication the greater is the bias it tolerates lower quality news thus commands a lower price second bias makes certain stories more likely than others given their private information journalists may bias their stories if their career prospects can be advanced by being published on the front page news organizations can control bias by restricting the discretion allowed to journalists but granting discretion and tolerating bias can increase profits if it allows journalists to be hired at a lower wage bias is not driven from the market by a rival news organization nor by a news organization with an opposing bias and the profits of a high bias news organization can be higher than the profits of a low bias one moreover bias can be greater with competition than with a monopoly news organization if individuals collectively choose regulation in place of their individual decision making bias increases the expected stringency of regulation

revealing information in electoral competition electoral competition between two expert candidates may lead to inefficient platform choices the present paper studies electoral competition between two experts and a third uninformed candidate the latter behaves populistically this seemingly useless candidate restores efficiency the paper then endogenizes information acquisition if the information acquisition costs are low then equilibria with i three expert candidates or ii two experts and one uninformed candidate may arise there are costs such that the latter equilibrium is the only pure strategy equilibrium in which information is transmitted

fiscal policy in a small open economy an integration of the short run heckscher ohlin and capital accumulation models this paper incorporates the response to fiscal policies described by the heckscher ohllin and sector specific capital models within a more general framework of two sector growth for a small open e

strategic disclosure of research results the cost of proving your honesty in situations where a biased sender provides verifiable information to a receiver i study how strategic reporting affects the incentives to search for information research provides series of signals that can be used selectively in reporting i show that the sender is strictly worse off when his research effort is not observed by the receiver he has to conduct more research than in the observable case and in equilibrium discloses all the information he obtained however this extra research can be socially beneficial and mandatory disclosure of results can thus be welfare reducing finally i identify cases where the sender withholds evidence and for which mandatory disclosure rules become more attractive in 2002 editors of eleven of the most prestigious medical journals announced that they would only publish the results of studies that were entered at their start in a publicly available database 1 pharmaceutical firms conduct clinical trials to test the efficacy and potential side effects of their drugs and to compare them to competitors products publishing results of studies is an efficient way to influence doctors prescriptions and patients tastes however firms can conduct multiple trials and select the most favourable results the system of mandatory disclosure adopted by medical journals is a response to the fear of such selective publishing 2 it makes the research effort of pharmaceutical firms more observable and will influence both the information they disclose and the amount of research they perform in the present article i study the interaction between the research and disclosure decisions which is an essential element in many settings the adoption of mandatory disclosure rules has subtle effects and i discover that leaving the research effort unobservable can sometimes be socially beneficial 3 i study the interaction between research and disclosure in a model where a biased sender searches for information and communicates it strategically to a receiver who will

quantity restrictions on advertising commercial media bias and welfare abstract we study the welfare effect of a quantity restriction on advertising in free to air television and other advertising financed media in the presence of commercial media bias broadcasters face a trade off between increasing the number of viewers by sending content that is highly valued by viewers and increasing the price of advertising by choosing advertiser friendly content a cap on advertising drives the per viewer price of ads up thus content improves for viewers therefore the cap can be welfare enhancing even when viewers are not ad averse competition among broadcasters makes it more likely that a cap on advertising improves welfare thus there is a complementarity between regulation and competition on this market we also show that a tax on advertising revenues has quite different effects than a cap on advertising quantity

bias in economic news the reporting of nominal exchange rate behavior in colombia proquest denotes formulae omitted the behavior of the nominal exchange rate ner is regularly reported and commented on in colombian newspapers editorials and op eds however the number and flavor of the news and commentary seem to increase disproportionately during revaluation in contrast to periods of devaluation 1 during the course of a revaluation it is common to read claims not facts in the press of firms and entire industries in distress owing to revaluation and arguments about the benefits of outdated policies such as fixed and multiple exchange rates implemented after 1967 with the enactment of law 444 congreso de colombia 1967 if not a dollarization of the economy 2on one hand many news articles and op ed pieces often maintain that revaluation is devastating for the macroeconomic performance of the country owing to the reduced income for exporters and holders of foreign debt and the subsequent effects on the employment and wages of workers in related industries on the other hand when devaluation occurs little attention is paid in news editorials or op eds there are no complaints addressing the plausible effects of a devaluation such as inflation from higher prices of foreign capital machinery and equipment or imported raw materials this asymmetry in media reporting is hard to understand why would revaluation be more important to report and discuss than devaluation why are there claims of the benefits of a fixed exchange rate when the country has already gone through the crippling effects of an exchange rate black market premium easterly 2002 p 222 describes a high black market premium as a punitive tax on exporters not a good incentive for growth finally why after almost twenty years of experience with a market determined nominal exchange rate is revaluation still reported as harmful for the economy even though there have been more devaluation episodes than revaluation ones 3 one answer to these questions lies in media bias in reporting the behavior of the ner the existence of an interest group supplying media outlets with news to increase the awareness of readers and government officials of the catastrophic consequences of revaluation is considered when this is the case the media benefit from a larger audience and subsequent higher income from advertising revenues the interest group s goal is further satisfied when the fiscal authority offers subsidies or the monetary authority intervenes in the exchange rate market when a government related institution steps in to tame the expressions of discomfort it fulfills the goal of increasing political affection and public acceptance there is a growing literature on the economics of media bias and media slant gentzkow and shapiro 2008 and larcinese puglisi and snyder 2011 offer a review of the theoretical and empirical approaches to this topic the literature describes both supply and demand side models on the supply side the distortions of the news its relationship with the private sector and the government capture of media are the core subjects on the demand side the distortion comes from the public and its preference for news with a certain bias or slant and the media competition for their attention the empirical evidence of media bias shown in this paper fits into the supply side models and the idea of media capture not by the government but by an interest group specifically the work of corneo 2006 is an appropriate analytic framework for the alleged sources of media bias and slant in this paper corneo 2006 builds a voting model of media capture at the hands of special interests to begin with the interest group looking for a policy that will favor its current status seeks to form a coalition with the media the media can accept or refuse the formation of a coalition when they do refuse media demonstrate their independence and commitment to honest reporting

the balanced us press we measure the relative ideological positions of newspapers voters interest groups and political parties using data on ballot propositions we exploit the fact that newspapers parties and interest groups take positions on these propositions and the fact that citizens ultimately vote on them we find that on average newspapers in the united states are located almost exactly at the median voter in their states that is they are balanced around the median voter still there is a significant amount of ideological heterogeneity across newspapers which is smaller than the one found for interest groups however when we group propositions by issue area we find a sizable amount of ideological imbalance broadly speaking newspapers are to the left of the state level median voter on many social issues and to the right on many economic issues to complete the picture we use two existing methods of measuring bias and show that the news and editorial sections of newspapers have almost identical partisan positions

citizen editors endogenous information acquisition and news accuracy abstract this paper provides a model of the market for news where profit maximizing media outlets choose their editors from a population of rational citizens the analysis identifies a novel mechanism of media bias the bias in a media outlet s news reports is the result of the slanted endogenous information acquisition strategy of its editor in particular the results show that the expected accuracy of news reports is lower the more ideological an editor is nevertheless citizens find it optimal to acquire information from a media outlet whose editor has similar ideological preferences depending on the distribution of citizens ideological preferences a media outlet may choose an ideological editor even in a monopolistic market moreover ideological editors are more likely to be present in the market for news i the higher the number of media outlets competing in the market for news ii the lower the opportunity cost that citizens have to incur to acquire information

isolated capital cities accountability and corruption evidence from us states we show that isolated capital cities are robustly associated with greater levels of corruption across us states in line with the view that this isolation reduces accountability we then provide direct evidence that the spatial distribution of population relative to the capital affects different accountability mechanisms newspapers cover state politics more when readers are closer to the capital voters who live far from the capital are less knowledgeable and interested in state politics and they turn out less in state elections we also find that isolated capitals are associated with more money in state level campaigns and worse public good provision jel d72 d73 h41 h83 k42 r23

competition of newspapers and the location of political parties in this paper we suggest a model for an analysis of how newspapers and political parties determine their ideological orientation and how both decisions depend on each other quite naturally dissemination of information plays an important role the model is set up as a two stage game because elements of horizontal as well as vertical product differentiation are present in this model location patterns in ideology space exhibit in general neither maximal nor minimal differentiation although we keep quite close to the downs model with information as the most important distinguishing feature furthermore the model shows by way of example that economic theory can be a useful tool to investigate issues which are central to communication science

mass media and public policy abstract if more informed voters receive favorable policies then mass media should influence policy because it provides most of the information people use in voting this paper uses a simple model to analyze the effect of mass media provision of news on a number of policy issues redistribution the size of the government sector rents and corruption the effectiveness of lobby groups and political business cycles it is easy to deal with such a wide range of issues because existing models of political competition often include informed and uniformed voters modelling mass media simply endogenizes who is informed and who is not the paper also discusses empirical evidence and point to areas for future research

a public and private choice model of broadcasting this paper has established a framework for the analysis of program diversity and audience shares under different regimes of ownership regulation and channel quality the model is one of comparative statics and lends itself to analytical solutions it can serve as a tool to clarify programming decision making and the impact of various institutional arrangements the audience maximization of commercial broadcasting leads to program quality similar to that of a direct democratic process to create a bias towards quality alternative mechanisms had to be introduced that together with the potential for the propaganda use of broadcasting and the potentially large rents of controlling a scarce channel made questions of broadcast policy extraordinarily hard fought especially in european countries however the emergence of alternative distribution channels and payment mechanisms has moved television programs much more into the mainstream of economic transactions in consequence the need to use the political arena to assure the supply of certain programs has declined the marginal losses to incumbent channels has successively decreased and the propaganda reach has been reduced by the spread of programs over the distribution therefore liberalization is less resisted because the stakes have become lower

media markets special interests and voters abstract this paper examines the role of mass media in countering special interest group influence i use the concentration of campaign contributions from political action committees to proxy for special interests capture of us senate candidates from 1980 to 2002 and compare the reaction of voters to increases in concentration in two different types of media markets in state media markets and out of state media markets unlike in state media markets out of state markets focus on neighboring states politics and elections thus if citizens punish political capture increases in concentration of special interest contributions to a particular candidate should reduce his vote share in in state counties relative to the out of state counties where the candidate receives less coverage i find that a one standard deviation increase in concentration of special interest contributions to incumbents reduces their vote share by about 0 5 to 1 5 percentage points in in state counties relative to the out of state counties robustness checks suggest that these results are not driven by omitted senator characteristics or by differences between in state and out of state counties along dimensions other than the media environment

press advertising and the ascent of the pensee unique the press industry depends in a crucial way on the possibility of financing an important fraction of its activities by advertising receipts we show that this induces the editors of newspapers to moderate in several cases the political message they display to their readers compared with the political opinions they would have expressed otherwise to this end we consider a three stage game in which editors select sequentially their political image the price of their newspaper and the advertising tariff they oppose to the advertisers the intuition of the result lies in the fact that editors have to sell tasteless political messages to their readers in order to sell a larger audience to the advertisers

news consumption and media bias bias in the market for news is well documented recent research in economics explains the phenomenon by assuming that consumers want to read watch news that is consistent with their tastes or prior beliefs rather than the truth the present paper builds on this idea but recognizes that i besides biased consumers there are also conscientious consumers whose sole interest is in discovering the truth and ii consistent with reality media bias is constrained by the truth these two factors were expected to limit media bias in a competitive setting our results reveal the opposite we find that media bias may increase when there are more conscientious consumers however this increased media bias does not necessarily hurt conscientious consumers who may be able to recover more information from multiple media outlets the more the outlets are biased we discuss the practical implications of these findings for media positioning media pricing media planning and the targeting of advertising

news media and crime perceptions evidence from a natural experiment abstract in democracies voters rely on media outlets to learn about politically salient issues this raises an important question how strongly can media affect public perceptions this paper uses a natural experiment the staggered introduction of the digital tv signal in italy to measure the effect of media persuasion on the perceptions individuals hold we focus on crime perceptions and combining channel specific viewership and content data we show that the reduced exposure to channels characterized by high levels of crime reporting decreases individual concerns about crime the effect is driven by individuals aged 50 and over who turn out to be more exposed to television while using other sources of information less frequently finally we provide evidence about the effect of the digital introduction on public policies closely related to crime perceptions and on voting behaviour

the effect of ideological positions on job market interaction a spatial analysis abstract reporters and editors may not have the same ideology when an editor wants to employ a new reporter with a different ideology they have to negotiate the price of moving from their own ideology to the other s ideology we focus on the job market for reporters where the agents negotiate over the ideological position to be reported and wage we adopt a spatial model in which each agent suffers a utility loss as the agreed upon position moves away from his her favored one equilibrium determines a threshold ideological gap for a match to be formed our analysis generates a natural separation between extreme mildly extreme and moderate ideologies furthermore we find that agents that hold extreme ideologies compromise less than moderates this formulation may be applied to other situations in which agents involve monetary and non monetary considerations especially a preference for social proximity jel codes j32 j44

extremist platforms political consequences of profit seeking media we analyze how information about candidate quality affects the choice of electoral platforms made by an office motivated political challenger the incumbent is of known quality and located at the ideal policy of the voter the voter cares for both policy and the candidates quality and can learn about the challenger s quality by buying information a high quality challenger then has an incentive to signal her quality by choosing a policy that induces the voter to buy information we first study the benchmark case in which the information is supplied exogenously and its quality is independent of the challenger s platform this yields multiple equilibria and indeterminacy of equilibrium platforms by contrast when the information is supplied by a profit maximizing media outlet its quality depends on the challenger s platform and we obtain a unique equilibrium platform in particular when the incumbent s quality is relatively low the media coverage rises and the challenger s platform diverges further from the voter s ideal policy as the voter s preference for quality increases

a spatial theory of media slant and voter choice we develop a theory of media slant as a systematic filtering of political news that reduces multidimensional politics to the one dimensional space perceived by voters economic and political choices are interdependent in our theory expected electoral results influence economic choices and economic choices in turn influence voting behaviour in a two candidate election we show that media favouring the front runner will focus on issues unlikely to deliver a surprise while media favouring the underdog will gamble for resurrection we characterize the socially optimal slant and show that it coincides with the one favoured by the underdog under a variety of circumstances balanced media giving each issue equal coverage may be worse for voters than partisan media

summits riots and media attention the political economy of information on trade and globalisation supply of information has increased rapidly through the growth of commercial media and technological innovations yet economists still blame anti globalists demonstrations and public opposition to trade liberalisation on poor information this paper analyses how the structure of the media industry affects the distribution of information on trade policy and globalisation we present an empirical analysis of belgian media reporting on trade policy and globalisation over the 1999 2002 period supports these hypotheses and finds strong negative bias in media coverage moreover we find that media coverage of trade policy and globalisation is highly concentrated around summit meetings of political leaders media attention in the popular press is heavily influenced by riots and demonstrations at summits the paper points at important implications for public information on trade policy and globalisation and for economists

political polarization and the electoral effects of media bias abstract we develop a model in which profits of media firms depend on their audience ratings and maximizing profits may involve catering to a partisan audience by suppressing information that the partisan audience does not like hearing while voters are rational understand the nature of the news suppression bias and update appropriately important information is lost through bias and can lead to electoral mistakes we characterize those conditions that give rise to electoral mistakes showing that heightened political polarization and asymmetric distributions of voter ideologies make electoral mistakes more likely even if the median ideology is a centrist and centrist voters gain access to unbiased news media bias can generate excessive cross over voting which in turn can lead to the election of the wrong candidate

manipulated news model electoral competition and mass media abstract this paper investigates the relationship between media manipulation the strategic suppression of relevant information by mass media and self mediatization the strategic exploitation of media coverage by candidates in elections in the model a voter cannot directly observe the policies proposed by two office motivated candidates the voter learns this information through media reports before voting takes place while the media outlet suppresses some of this information because the voter s decision making could be incorrect direct distortion the candidates have an incentive to win the election by influencing the media coverage through policy settings indirect distortion as a result policy convergence to the voter s ideal policy occurs if and only if the media bias is sufficiently small we then characterize the set of equilibria in terms of the degree of distortion the results suggest that if either strategic media manipulation or competition among the candidates is omitted then the distortion is nonnegligibly misspecified

mass media and special interest groups abstract media revenues are an important determinant of media behavior it is generally accepted that news coverage depends not only on the preferences of media consumers but also on the preferences of advertisers or subsidizing groups however existing models reach the opposite conclusions about the relationship between the profitability of advertising and media bias we present a theoretical model that reconciles these results the model shows that the sign of the effect of marginal costs of production or marginal advertising revenues on the level of distortion in news coverage depends on complementarity or substitutability between media bias and audience size for an interest group the existence of a budget constraint for an interest group and media outlets reliance on subscription in addition to advertising revenues

the inadvertent consequences of al qaeda news coverage abstract this paper explores the consequences of al qaeda news coverage related to i subsequent al qaeda attacks ii the group s popularity and iii radicalization i construct a daily index of al qaeda news coverage in the us from cnn nbc cbs fox news the nyt and the wapo to isolate causality i employ an instrumental variable strategy based on disaster deaths everything else equal the us media reports less on al qaeda when more people are dying from disasters worldwide at its mean al qaeda coverage is suggested to cause 0 2 0 3 attacks per day in the upcoming 1 4 weeks i find no evidence that attacks are merely rescheduled because of diminished media exposure rather the total number of attacks increases with coverage this effect is driven by easy to plan attack types and by al qaeda attacks in iraq results are robust to an array of alternative specifications and consistent when considering news coverage on al jazeera al qaeda coverage also increases the group s online popularity and search topics that are potentially indicative of radicalization such as jihad and al qaeda s magazine inspire are receiving more attention on google nevertheless these results should be interpreted carefully as it remains difficult to fully disentangle online interest in al qaeda and sympathy with the group s mission

peasants or bankers the american electorate and the u s economy t he usual model of electoral reaction to economic conditions assumes the retrospective economic voter who bases expectations solely on recent economic performance or personal economic experience voter as peasant a second model assumes a sophisticated economic voter who incorporates new information about the future into personal economic expectations voter as banker using the components both retrospective and prospective of the index of consumer sentiment ics as intervening variables between economic conditions and approval we find that the prospective component fully accounts for the presidential approval time series with aggregate consumer expectations about long term business conditions in the approval equation neither the usual economic indicators not the other ics components matter moreover short term changes in consumer expectations respond more to current forecasts than to the current economy the qualitative result is a rational expectations outcome the electorate anticipates the economic future and rewards or punishes the president for economic events before they happen economics moves political behavior with hard times administrations lose support with good times they gain it we know this to be true but when we ask how by what processes the political translation of economic experience occurs the an

government control of the media abstract we present a formal model of government control of the media to illuminate variation in media freedom across countries and over time media bias is greater and state ownership of the media more likely when the government has a particular interest in mobilizing citizens to take actions that further some political objective but are not necessarily in citizens individual best interest however the distinction between state and private media is smaller large advertising markets reduce media bias in both state and private media but increase the incentive for the government to nationalize private media media bias in state and private media markets diverge as governments become more democratic whereas media bias in democracies and autocracies converge as positive externalities from mobilization increase

productivity shocks non traded goods and optimal capital accumulation this paper considers the interaction of saving and investment in determining the current account for a small open economy subjected to productivity shocks by emphasizing the distinction between traded and non traded goods the analysis highlights the crucial role of the real exchange rate in macroeconomic adjustment our results demonstrate the importance of intertemporal substitution for determining the response of investment to anticipated productivity disturbances we also show how the correlation of movements in saving and investment following an anticipated disturbance depends critically on relative sectoral factor intensities

media as watchdogs the role of news media in electoral competition abstract we develop an equilibrium model to analyze the role of the media in electoral competition when policy payoffs are state dependent party policies do not converge to the median voter s ideal policy if the media report only party policies news analysis about the state though possibly biased can discipline off equilibrium deviations and make the parties adopt more centrist policies since voters are rational the party favored by the media need not win with a higher probability instead media bias may reduce the effectiveness of electoral competition and lead to more polarized policies

media bias in china this paper examines whether and how market competition affected the political bias of government owned newspapers in china from 1981 to 2011 we measure media bias based on coverage of government mouthpiece content propaganda relative to commercial content we first find that a reform that forced newspaper exits reduced competition affected media bias by increasing product specialization with some papers focusing on propaganda and others on commercial content second lower level governments produce less biased content and launch commercial newspapers earlier eroding higher level governments political goals third bottom up competition intensifies the politico economic tradeoff leading to product proliferation and less audience exposure to propaganda

collective mass media bias social media and non partisans abstract this paper builds a simple political agency model to demonstrate that there is a possible collective bias in the reporting of political issues and suggests that this bias may lead society to a collective failure in which overall social welfare is harmed in our model media outlets aim to build a reputation of high adeptness at policy forecasting and audiences rely on policy information to make better decisions and update their beliefs regarding the quality of each outlet after the election outcome is revealed the role of social media is incorporated into our model s framework thus the chance of a non partisan individual being informed about each political candidate s proposed agenda depends on the collective mass media coverage of that candidate as well as the number of partisan individuals in favor of that candidate since it is assumed that partisan voters post politically relevant information on social networks

does conflict of interest lead to biased coverage evidence from movie reviews media outlets are increasingly owned by conglomerates inducing a conflict of interest a media outlet can bias its coverage to benefit companies in the same group we test for bias by examining movie reviews in media outlets owned by news corp such as the wall street journal and time warner such as time we find higher ratings for 20th century fox movies in news corp outlets compared to movies by other studios to disentangle bias from correlation of taste we introduce and validate a novel matching procedure using individual movie ratings from online platforms using this procedure we find no evidence of bias in news corp nor time warner outlets we reject even small effects such as bias of one extra star out of four every thirteen movies we test for differential bias when the return to bias is plausibly higher examine bias by media outlet and by journalist as well as editorial bias we also consider bias by omission whether media outlets are more likely to review highly rated movies by affiliated studios and conflict of interest within a movie aggregator in none of these dimensions do we find evidence of bias we relate to previous work and discuss three explanations for the lack of bias in our setting high values of media reputation organizational features in a conglomerate and low returns to bias

is the media liberal an indirect test using news magazine circulation many critics allege that the us national news media is biased in favour of liberal causes and democratic candidates the lack of an objective measure of news content ensures that such charges remain controversial i consider an indirect test for media bias if the national news media do exhibit a liberal bias consumption should be higher in liberal media markets ceteris paribus i examine determinants of circulation of the three major weekly news magazines across the us and find that newsweek and time have higher circulation in liberal markets while us news has higher circulation in conservative markets the evidence is consistent with a liberal bias for time and newsweek while us news may be relatively conservative but still left of centre or absolutely conservative

the political economy of hatred this paper develops a model of the interaction between the supply of hate creating stories from politicians and the willingness of voters to listen to hatred hatred is fostered with stories of an out group s crimes but the impact of these stories comes from repetition not truth hate creating stories are supplied by politicians when such actions help to discredit opponents whose policies benefit an out group egalitarians foment hatred against rich minorities opponents of redistribution build hatred against poor minorities hatred relies on people accepting rather than investigating hate creating stories hatred declines when there is private incentive to learn the truth increased economic interactions with a minority group may provide that incentive this framework is used to illuminate the evolution of anti black hatred in the united states south episodes of anti semitism in europe and the recent surge of anti americanism in the arab world

the effects of media slant on firm behavior abstract the media can impose reputational costs on firms because of its important role as an information intermediary and its ability to negatively slant coverage we exploit a quasi natural experiment that holds constant the information event across firms but varies the availability of a major news outlet in local markets we find that firms subject to the threat of slanted coverage suppress the release of negative information before the event and release it subsequently our results are consistent with theory on the active role firms can play in managing their reputational capital through anticipatory actions to avoid negative media coverage

media slant against foreign owners downsizing abstract using a unique data set from nationally distributed quality newspapers in germany we find evidence for both quantitative and qualitative media slant against foreign firms a downsizing foreign firm receives almost twice as much attention as a domestic firm and the tone of media reports is more negative media slant is a measure for economic xenophobia directed against foreign owners which constitutes an obstacle to foreign direct investment

the role of media for consumers inflation expectation formation the full information rational expectations model is clearly rejected by the data the expectation formation process has therefore important implications for macroeconomic outcomes we examine how consumers react to information provided by the media by taking into account that this information is imperfect we show that information rigidities play a role empirically intensive news reporting improves the accuracy of consumers inflation expectations because they receive more information however this effect depends on the tone of the news if news are badly toned the effect reverts

when can a news organization lead public opinion ideology versus market forces in decisions to make news do news organizations purposefullylead the public to support a particularideological agenda when debating thisquestion many analysts draw conclusionsfrom weak empirical evidence we introducea model that clarifies how a newsorganization s internal structure combineswith market forces to affect when it canlead public opinion we identify conditionsunder which liberal reporters orpolitically driven media magnates canachieve ideological goals we alsoilluminate important barriers that preventmany would be public opinion leaders fromever satisfying these conditions we showthat internal structure and market forcesare critical determinants of any newsorganization s power over public opinion

the market for news we investigate the market for news under two assumptions that readers hold beliefs which they like to see confirmed and that newspapers can slant stories toward these beliefs we show that on the topics where readers share common beliefs one should not expect accuracy even from competitive media competition results in lower prices but common slanting toward reader biases on topics where reader beliefs diverge such as politically divisive issues however newspapers segment the market and slant toward extreme positions yet in the aggregate a reader with access to all news sources could get an unbiased perspective generally speaking reader heterogeneity is more important for accuracy in media than competition per se

media capture in a democracy the role of wealth concentration abstract since objective news coverage is vital to democracy captured media can seriously distort collective decisions the current paper develops a voting model where citizens are uncertain about the welfare effects induced by alternative policy options and derive information about those effects from the mass media the media might however secretly collude with interest groups in order to influence the public opinion in the case of voting over the level of a productivity enhancing public bad it is shown that an increase in the concentration of firm ownership makes the occurrence of media bias more likely although media bias is not always welfare worsening conditions for it to raise welfare are restrictive

good news and bad news evidence of media bias in unemployment reports this study employs information obtained from media content analyses as well as economic and political data to investigate negativity in unemployment news between 2001 and 2010 in germany the data indicate a substantial bias in terms of the amounts of negative and positive reports compared with the actual development of unemployment moreover the media tend to place negative unemployment reports more prominently than positive ones the estimates suggest that the bias is not the consequence of journalists asymmetrically interpreting the official unemployment numbers instead it is associated with the exploitation of often non economic information and structural influences in the process of news production

the corporate propensity to save why do corporations accumulate liquid assets we show theoretically that intertemporal trade offs between interest income taxation and the cost of external finance determine optimal savings intriguingly we find that controlling for tobin s q saving and cash flow are negatively related because firms lower cash reserves to invest after receiving positive cash flow shocks and vice versa consistent with theory we estimate negative propensities to save out of cash flow we also find that income uncertainty affects saving more than do external finance constraints therefore contrary to previous evidence saving propensities reflect too many forces to be used to measure external finance constraints

minimal and maximal product differentiation in hotelling s duopoly abstract hotelling s 1929 model of duopolistic competition is re examined a family of utility functions is used which has as a special case hotelling s original utility function in a two stage location price game it is shown that an equilibrium exists when the curvature of the utility functions in the space of characteristics is sufficiently high the subgame perfect equilibrium never exhibits minimum product differentiation on the other hand not all equilibria are at maximal product differentiation

capital movements intersectoral resource shifts and the trade balance abstract in this paper i consider the interactions between the internal structure of the economy and its external balance in an intertemporal set up with perfect foresight a simple pattern emerges current account deficits are associated with depreciating real exchange rates the incorporation of real investments and government spendings change this pattern in a systematic way depending on factor intensities the composition of government spending and its timing

selective reporting of factual content by commercial media the authors study the market for factual content and examine whether competition increases or decreases its provision factual content is supplied by commercial media firms which observe a set of facts depicting the state of the world and selectively decide how to report them consumers value content that matches their opinion which incentivizes media firms to slant their reports by omitting certain facts novel features in the authors model include consumers ability to anticipate the media s incentives for slant and the requirement that all media stances must be supported by facts furthermore consumers find reports with more facts to be more convincing despite consumers ability to detect slant and their demand for factual support the research shows that competition results in consumers reading fewer facts and being unable to update their prior beliefs about the state of the world the authors also find that a monopoly medium may be more polarizing than competitive media and that polarized report

demand for slant how abstention shapes voters choice of news media political commentators warn that the fragmentation of the modern media landscape induces voters to withdraw into information cocoons and segregate along ideological lines we show that the option to abstain breaks ideological segregation and generates cross over in news consumption voters with considerable leanings towards a candidate demand information that is less biased towards that candidate than voters who are more centrist this non monotonicity in the demand for slant makes voters ideologies non recoverable from their choice of news media and generates disproportionate demand for media outlets that are centrist or only moderately biased it also implies that polarisation of the electorate may lead to an ideological moderation in news consumption

income effects and paradoxes in the theory of international trade every field in economics has its paradoxes phenomena which initially are thought to confound economic sense but ultimately come to be better understood the field of international trade can claim its fair share the examples of the metzler paradox wherein a tariff fails to provide protection or that of immerising growth wherein a country suffers a loss in welfare despite an improvement in production possibilities come easily to mind more recently a reexamination of the transfer problem in the context of many country trade or of tax distortions has revealed possibilities for donor countries to gain or transfer recipients to lose results which would be considered so paradoxical in standard treatments as to be ruled out by stability arguments behind each of the examples just cited lies a rational explanation in which income effects prove crucial in supporting a paradoxical outcome in some situations the potential for paradox rests on the possibility of income redistribution nationally or internationally when tastes differ among the various trading participants paradox becomes impossible if tastes at the margin are identical in other instances income redistribution is not the crucial mechanism and paradoxical outcomes may occur even if all traders possess the same taste patterns all cases share the property that paradoxes can arise only if the terms of trade are sufficiently disturbed substitution effects high values of which serve to dampen the required adjustment of prices to a market disturbance thus work to prevent paradoxical outcomes in the first section of this paper i focus on those issues for which income effects are associated with income redistribution especially the analysis of tariffs and transfers in markets that initially are free of taxes or other distortions in the second section i analyse an issue for which income redistribution is no longer the central ingredient the welfare consequences of growth a standard technique in game theory allows for a reinterpretation of the growth case to reveal the fundamental connection between a wide variety of standard two country results in the theory of international trade and the possibility of paradoxes in the three agent transfer problem i would therefore argue that the three agent transfer literature has wider applicability than is commonly perceived in the final section i analyse briefly the frequently encountered argument that some instances of paradoxical welfare loss can be avoided by optimal tariff policy i wish to thank isaias coelho for helpful conversations makoto yano for stimulating my interest in the transfer problem with many agents and j peter neary for comments on an earlier draft useful suggestions were also received at seminar presentations at the institute for international economic studies in stockholm and the london school of economics research support was provided by the national science foundation grants ses 78o6159 and ses 8309386 i the role of substitution effects in transfer paradoxes with more than two commodities and agents is discussed by de meza 1983

information manipulation and climate agreements it appears that news media and some pro environmental organizations have the tendency to accentuate or even exaggerate the damage caused by climate change this article provides a rationale for this tendency by using a modified international environmental agreement iea model with asymmetric information we find that the information manipulation has an instrumental value as it ex post induces more countries to participate in an iea which will eventually enhance global welfare from the ex ante perspective however the impact that manipulating information has on the level of participation in an iea and on welfare is ambiguous

inequality and media capture abstract popular support of redistributive policies depends on information they have about the tax system and efficiency of public projects mass media provides a convenient means for manipulating public opinion even when voters understand that the media can be biased i develop a theory of media capture in which the rich can influence information published in a media outlet at a cost the model shows that higher inequality is associated with lower media freedom this effect is stronger in democratic regimes i find empirical support for the model in both panel data and cross country analysis

the impact of newspapers on consumer confidence does spin bias exist it is sometimes argued that news reports in the media suffer from biased reporting mullainathan and shleifer 2002 2005 argue that there are two types of media bias one bias called ideology reflects a news outlet s desire to affect reader opinions in a particular direction the second bias referred to as spin or slanting reflects the outlet s attempt to simply create a memorable story competition between outlets can eliminate the effect of ideological bias but increases the incentive to spin or slant stories we examine whether we find some evidence of spin in dutch newspaper reporting on the state of the economy if newspapers are indeed able to create memorable stories this should according to our hypothesis affect the opinion of readers with respect to the state of the economy sentiments about the actual state of the economy could be magnified by spin as a result consumer confidence a variable that routinely measures the opinion on the state of the economy can be expected to be affec

reporting for sale the market for news coverage this paper proposes a formal model of the market for political news under reasonable market conditions and when the audience has psychological biases it may be profitable for outlets to differentiate their coverage moreover the implications of the model speak to a deeper impact of political polarization of the electorate

mass media competition political competition and public policy if better informed voters receive favourable policies then mass media will affect policy because mass media provide most of the information people use in voting this paper models the incentives of the media to deliver news to different groups the increasing returns to scale technology and advertising financing of media firms induce them to provide more news to large groups such as taxpayers and dispersed consumer interests and groups that are valuable to advertisers this news bias alters the tradeoff in political competition and therefore introduces a bias in public policy the paper also discusses the effects of broadcast media replacing newspapers as the main information source about politics the model predicts that this change should raise spending on government programmes used by poor and rural voters

who owns the media the authors examine patterns of media ownership in 97 countries around the world they find that almost universally the largest media firms are controlled by the government or by private families government ownership is more pervasive in broadcasting than in the printed media government ownership is generally associated with less press freedom fewer political and economic rights inferior governance and most conspicuously inferior social outcomes in education and health the adverse effects of government ownership on political and economic freedom are stronger for newspapers than for television the adverse effects of government ownership of the media do not appear to be restricted solely to instances of government monopoly the authors present a range of evidence on the adverse consequences of state ownership of the media state ownership of the media is often argued to be justified on behalf of the social needs of the disadvantaged but if their findings are correct increasing private ownership of the media through privatization or by encouraging the entry of privately owned media can advance a variety of political and economic goals especially those of meeting the social needs of the poor

idiosyncratic shocks and the role of nonconvexities in plant and aggregate investment dynamics we examine a model of lumpy investment wherein establishments face persistent shocks to common and plant specific productivity and nonconvex adjustment costs lead them to pursue generalized s s investment rules we allow persistent heterogeneity in both capital and total factor productivity alongside low level investments exempt from adjustment costs to develop the first model consistent with available evidence on establishment level investment rates reassessing the implications of lumpy investment for aggregate dynamics in this setting we find that they remain substantial when factor supply considerations are ignored but are quantitatively irrelevant in general equilibrium the substantial implications of general equilibrium extend beyond the dynamics of aggregate series while the presence of idiosyncratic shocks makes the time averaged distribution of plant level investment rates largely invariant to market clearing movements in real wages and interest rates we show that the dynamics of plants investments differ sharply in their presence thus model based estimations of capital adjustment costs involving panel data may be quite sensitive to the assumption about equilibrium our analysis also offers new insights about how nonconvex adjustment costs influence investment at the plant when establishments face large and weakly persistent idiosyncratic productivity shocks consistent with existing estimates we find that nonconvex costs do not cause lumpy investments but act to eliminate them

terms of trade factor intensities and the current account in a life cycle model this paper examines the effects of terms of trade changes on the external adjustment of a small open economy where each consumer has a life cycle saving function the supply side of the economy is given by the standard two sector model with two primary factors labour and capital it is shown that when both commodities are produced a terms of trade deterioration leads to a current account deficit surplus if the export import sector is more labour intensive

relying on the information of interested parties we investigate the conventional wisdom that competition among interested parties attempting to influence a decisionmaker by providing verifiable information elicits all relevant information we find that if the decisionmaker is strategically sophisticated and well informed about the relevant variables and about the preferences of the interested party or parties competition may be unnecessary to achieve this result if the decisionmaker is unsophisticated or not well informed competition is not generally sufficient if the interested parties interests are sufficiently opposed however or if the decisionmaker is seeking to advance the parties welfare then competition can reduce or even eliminate the decisionmaker s need for prior knowledge about the relevant variables and for strategic sophistication in other settings only the combination of competition among information providers and a sophisticated skepticism is sufficient to allow effective decisionmaking

downs meets d aspremont and company convergence versus differentiation in politics and the media abstract media firms have incentives to differentiate their news products to soften price competition when consumers value cognitive consistency between the news they read and the policies they support politicians are induced to propose more polarized policies to conform to a polarized media landscape a stronger commercial motive or a weaker preference for editorial neutrality in the media exacerbates this effect and causes party policies to become more extreme we find that prices for news products are higher when consumers have a demand for cognitive consistency despite the fact that maximal product differentiation does not hold for media firms

a spatial theory of news consumption and electoral competition we characterize the optimal editorial positions of the media in a model in which the media influence both voting behaviour and party policies political parties are less likely to choose partisan policies when more voters consume informative news when there are two media outlets each should be slightly biased relative to its audience in order to attract voters with relatively extreme views voter welfare is typically higher under a duopoly than under a monopoly two media outlets under joint ownership may provide more diverse viewpoints than two independent ones but voter welfare is not always higher copyright 2008 wiley blackwell