In 1936, John Maynard Keynes proposed that emotions and instincts are pivotal in decision-making, particularly for investors. Both positive and negative moods can influence judgments and decisions, extending to economic and financial choices. Intuitions, emotional states, and biases significantly shape how people think and act. Measuring mood or sentiment is challenging, but surveys and data collection methods, such as confidence indices and consensus forecasts, offer some solutions. Recently, the availability of web data, including search engine queries and social media activity, has provided high-frequency sentiment measures. For example, the Italian National Statistical Institute’s Social Mood on Economy Index (SMEI) uses Twitter data to assess economic sentiment in Italy. The relationship between SMEI and financial market activity, specifically the FTSE MIB index and its volatility, is examined using a trivariate Vector Autoregressive model, taking into account the impact of the COVID-19 pandemic.
Nothing contributes so much to the prosperity and happiness of a country as high profits