The New Palgrave Dictionary of Economics

Living Edition
| Editors: Palgrave Macmillan

News Shocks

  • Nir JaimovichEmail author
Living reference work entry

Later version available View entry history



News shocks are shocks that are useful for predicting future fundamentals but do not affect current fundamentals. While the idea of “news shocks” as a driver of economic fluctuations has been present since the early work on business cycles it had been formalized and assessed in the last decade. This article discusses both the theoretical impact of news shocks on the economy and their empirical relevance for business cycles.


Business Cycles Shocks Information 

JEL Classifications

E13 E20 E32 
This is a preview of subscription content, log in to check access.


  1. Alexopoulos. 2011. Read all about it!! What happens following a technology shock? American Economic Review 101(4):1144–1179.Google Scholar
  2. Arezki, Ramey, and Sheng. 2016. News shocks in open economies: Evidence from giant oil discoveries. Quarterly Journal of Economics. Forthcoming.Google Scholar
  3. Barsky, and Sims. 2011. News shocks and business cycles. Journal of Monetary Economics 58(3): 273–289.Google Scholar
  4. Beaudry, and Portier. 2004. An exploration into Pigou’s theory of cycles. Journal of Monetary Economics 51:1183–1216.Google Scholar
  5. Beaudry, and Portier. 2006. News, Stock prices, and economic fluctuations. American Economic Review 96(4):1293–1307.Google Scholar
  6. Beaudry, and Portier. 2014. The news view of business cycles: Insights and challenges. Journal of Economic Literature 52(4):993–1074.Google Scholar
  7. Brückner, and Pappa. 2015. News shocks in the data: Olympic games and their macroeconomic effects. Journal of Money, Credit and Banking 47(7).Google Scholar
  8. Mertens, and Ravn 2012. Empirical evidence on the aggregate effects of anticipated and unanticipated US tax policy shocks. American Economic Journal: Economic Policy 4(2):145–181.Google Scholar
  9. Pigou. 1927. Industrial fluctuations. London: MacMillan.Google Scholar
  10. Rebelo. 2005. Real business cycle models: Past, present and future. Scandinavian Journal of Economics.Google Scholar
  11. Schmitt-Grohe′, and Uribe 2012. What’s news in business cycles. Econometrica 80(6):2733–2764.Google Scholar

Copyright information

© The Author(s) 2017

Authors and Affiliations

  1. 1.

Section editors and affiliations

  • Garett Jones

There are no affiliations available