Application of Textual Analysis in Economic Policy Uncertainty

Abstract

After the financial crisis, in order to alleviate the attendant rising unemployment, inflation, balance of payments imbalances, and the economic downturn, the government has to consider more involvement in addressing market failures by designating economic policies. This paper mainly introduces the economic policy uncertainty and some economic problems resulted from it. This paper explores the feasibility of textual analysis in solving EPU problems by method of case study and points out the limitations in the application process. Through literature review, the limitations of text analysis in China have been found-high context culture and a large number of unrelated economic policy reports have become obstacles. Based on the methodology of EPU and text analysis, the cases of the United States and Tunisia were analyzed to confirm the role of text analysis in measuring EPU issues. Finally, the conclusion is drawn that China should refer to the above two cases and combine the national conditions to solve the EPU problem.