The explanation is straightforward: the “national mood” influences trading decisions, and sentiment analysis of mass human behaviour — such as tweets, or search terms (pdf study) — is proving to be an effective way to tap the national mood.
The important thing here is that the content of the tweets (or search terms) needn’t be about the economy, or specific purchasing decisions, or whatever: it’s the average sense of optimism or pessimism that has the predictive power.
So let’s extrapolate: if Twitter reflects the national mood and predicts economy activity, would a change to the average tone of a nation’s tweets influence the underlying mood, or would it make Twitter an inaccurate herald?
Sentiment analysis is already being used by hedge funds to “gauge the direction of stocks“, suggesting that data sources such as search terms and social network activity are directly influencing trading decisions.
So, could a government set up a few hundred thousand Twitterbots to express happy thoughts, thereby boosting the economy?