Turning Economic Talk into Data

Throughout the nineteenth century, spikes in U.S. economic policy uncertainty-as measured by analysis of historical newspaper content using a Longformer classifier-coincided with and were largely driven by specific policy events such as the Embargo Act, debates surrounding national banks, and shifts in tariff legislation, as demonstrated by correlating topic prevalence-identified with a Llama-based classifier-with the overall uncertainty index.

New research shows how advanced language models can accurately gauge policy uncertainty from textual sources, offering a powerful upgrade to traditional methods.