Frankfurt School Launches Real-time Twitter-/x-based Inflation Expectations Index

Researchers from Frankfurt School of Finance & Management have developed a Twitter-/X-based Inflation Expectations Index. The index evaluates German tweets using advanced Natural Language Processing and creates a daily inflation expectations index – making real-time short-term inflation expectations for Germany available for the first time. The index is able to strongly correlate with realised inflation rates over this period, for example from Bundesbank surveys, and provides additional explanatory value and improved forecasting accuracy beyond existing measures for quantitative inflation expectations.