Page 126 - Invited Paper Session (IPS) - Volume 2

IPS 188 G. P. Samanta
as ‘inflation' reflects the ‘revealed expectations' of people and examine if the
Google search volume track or predict inflation rate. Though the short
empirical literature on the subject is mainly exploratory in nature, some of
those studies have reported quite encouraging results.
In this paper, we assess the information content of Google search volume
on two relevant keywords, viz., ‘price' and ‘inflation' in tracking or predicting
the inflation rate in India. Empirical results show that such an index for the
keyword ‘inflation' is useful to track inflation rates India based on both CPI-
Combined and CPI-Urban. Granger's causality tests also detect the strong
predictive ability of the search index. Future research in this emerging area can
be generalised in various ways, such as examining the information content of
Google search data about related keywords, checking the robustness of the
findings at different sub-national regions of India.

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