Fiscal policy in the Bundestag and the media

Mass media play a crucial role in a society. Media narratives have been used to describe, explain and forecast (macro)economic variables. However, little is known about how the media accompany fiscal policy debates in the German Bundestag. We address this question by constructing a fiscal policy sentiment index based on one of the leading newspapers in Germany, Frankfurter Allgemeine Zeitung. We apply NLP to obtain fiscal policy-related sentiment scores for FAZ articles and Bundestag speeches. We find that the two indices significantly correlate with each other, especially during recession periods. Further, we find that the sentiment indices are Granger causal to each other supporting interconnectedness between political debates and media reporting.