Event Details

Title: From Buzz to Bust: How Fake News Shapes the Business Cycle

Abstract: This paper explores the macroeconomic impact of technology-related fake news, a critical issue largely overlooked in economic research. By constructing a novel dataset of fact-checked technology statements from PolitiFact, we develop a proxy for a technology-related fake news shock and use it to recover their dynamic causal effects on business cycle dynamics. The results reveal that fake news heightens macroeconomic uncertainty, increases unemployment, and depresses production, contributing substantially to business cycle volatility. Notably, fake news conveying negative information exerts a disproportionately larger economic impact, offering important insights into how misinformation distorts economic outcomes and amplifies uncertainty.