Would one not expect there to be more discussion of economic policy at times when markets are more volatile? How do the authors know causality isn’t flowing in the other direction? It seems more plausible to me that at times of economic volatility there is also likely to be both more market volatility and more discussion of economic policy on cable news. So how do the authors control for that?
In financial news channels like CNBC and Bloomberg TV I agree with you, but in politics channels like Fox News or CNN the discussion of markets either happens when there is an extreme crisis (and then they don't interview politicians, and these episodes are excluded from the sample) or when there are policy proposals like tax cuts, in which case politicians tend to be the go-to interview partners.
This is why using only the minutes an active politicians is interviewed is a good choice. It avoids a lot of the confounding from economic crises.
Would one not expect there to be more discussion of economic policy at times when markets are more volatile? How do the authors know causality isn’t flowing in the other direction? It seems more plausible to me that at times of economic volatility there is also likely to be both more market volatility and more discussion of economic policy on cable news. So how do the authors control for that?
In financial news channels like CNBC and Bloomberg TV I agree with you, but in politics channels like Fox News or CNN the discussion of markets either happens when there is an extreme crisis (and then they don't interview politicians, and these episodes are excluded from the sample) or when there are policy proposals like tax cuts, in which case politicians tend to be the go-to interview partners.
This is why using only the minutes an active politicians is interviewed is a good choice. It avoids a lot of the confounding from economic crises.