1. New Shocks: Different Effects in Boom and Recession Maria Bolboaca and Sarah Fischer Discussion by Laurent Weill University of Strasbourg & Bank of Finland

2. 2 The paper in one slide Very interesting paper on the transmission of news shocks. Empirical contribution to this literature by considering that the linear world is too restrictive. “Strong bad news can make a boom end, while similarly strong good news do not have the same power to take the economy out of a recession. After a good news in normal times, there is a short-run boom followed by a bust in the medium-run.” I have four comments.

3. 3 Comment 1: motivation of the paper Wonderful motivation for the paper with the recent financial crisis: one channel of transmission from the financial sphere to the real world is likely to have been news… … but you use it in a rather poor way. OK, you mention it, but you only use one reference to stress the relevance of this channel of transmission: Petev and Pistaferri (2012).

4. 4 Comment 1: motivation of the paper In addition, it is one working paper from Stanford. And this paper is used to motivate the paper twice with exactly the same words in the introduction and in the conclusion: “As Petev and Pistaferri (2012) showed, in the case of the U.S. economy, growth in personal spending is closely linked to consumer confidence.”

5. 5 Comment 1: motivation of the paper You should cite more references for the influence of news in the transmission of the financial crisis. Chudik and Fratzcher (European Economic Review, 2011) Fratzscher (Journal of International Economics, 2012) Raddatz and Schmuckler (Journal of International Economics, 2012) Bhanot et al. (Journal of Banking and Finance, 2014)

6. 6 Comment 2: behavioral macroeconomics « Nothing guarantees that the responses to a bout of optimism (or a good news as we define a positive shock on the index of consumer sentiment) are the same regardless of the state of the economy. » « So far news shocks on future technological innovation have been analyzed in linear settings. We argue that the linear world is too restrictive and that we need to allow for state- dependent reaction to news.” « The asymmetry between good and bad news does not seem to play an important role » (in the conclusion)

7. 7 Comment 2: behavioral macroeconomics You should relate your paper to behavioral economics. Prospect theory: “the hurt of a $1000 loss is more painful than the benefit of a $1000 gain”. Not mentioned once. -While your hypotheses are related to the psychology of economic agents (consumer confidence). -While this literature provides support for a nonlinear analysis. Then you can strengthen the motivation of your research question by mentioning behavioral economics.

8. 8 Comment 3: supply-side vs. demand-side Literature on news-driven business cycles is only related to what is going on on the supply side. But the motivation of the paper in line with the financial crisis and consumer confidence looks to me more related to the demand side. And it is also the case for you as you write.

9. 9 Comment 3: supply-side vs. demand-side “As Petev and Pistaferri (2012) showed, in the case of the U.S. economy, growth in personal spending is closely linked to consumer confidence. When consumer confidence is low, people reduce their spendings and borrow less. Faced with lower demand, businesses do not buy new equipment or hire new people.”

10. 10 Comment 3: supply-side vs. demand-side Some contradiction between the motivation and the empirical investigation… …or at least some limits for the relevance of the empirical study. Shouldn’t we care more about demand-side news shocks given the financial crisis? Shouldn’t we also consider how consumer confidence influences demand indicators (investment, consumption) ? Why only considering the impact on TFP?

11. 11 Comment 4: lack of precision Be more precise in the argumentation “Survey data shows that in recession consumer confidence is low while in expansion it is high”. Which data? “Data indicate that the transition from good times to recession is in general steep and fast while the recovery phase is much longer and more gradual”. Which data?