  This paper investigates the relationship between economic media sentiment and
individuals' expetations and perceptions about economic conditions. We test if
economic media sentiment Granger-causes individuals' expectations and opinions
concerning economic conditions, controlling for macroeconomic variables. We
develop a measure of economic media sentiment using a supervised machine
learning method on a data set of Swedish economic media during the period
1993-2017. We classify the sentiment of 179,846 media items, stemming from
1,071 unique media outlets, and use the number of news items with positive and
negative sentiment to construct a time series index of economic media
sentiment. Our results show that this index Granger-causes individuals'
perception of macroeconomic conditions. This indicates that the way the
economic media selects and frames macroeconomic news matters for individuals'
aggregate perception of macroeconomic reality.
