Journal of Financial Economics Vol. 141 No. 1 2021
Eye in the sky: Private satellites and government macro data
Abstract
We develop an approach to identify whether recent technological advancements—such as the rise of commercial satellite-based macro estimates—can provide an alternative to government data. We measure the extent to which satellite estimates affect the value of a government macro announcement using its asset price impact. Our identification relies on cloud cover, which prevents satellites from observing economic activity at a few key hubs. Applying our approach, we find that some satellite estimates are now so effective that markets are no longer surprised by government announcements. Our results point to a future in which the resolution of macro uncertainty is smoother and governments have less control over macro information.
- DOI
- 10.1016/j.jfineco.2021.03.002
- Volume
- 141
- Issue
- 1
- Pages
- 234-254
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref