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Abstract
The aim of this paper is to investigate the effects of digital mass media on the formation of inflation expectations. In particular, this paper evaluates the effects of digital news on the GAP of inflation expectations between consumers and forecasters. For this, the Colombian economy for the period 2010-2018 is used as a case study. The methodology used consists of evaluating the effects of news on inflation provided by five representative digital newspapers on the GAP of expectations. Through econometric regressions, it is found that a greater exposure of consumers to mass media such as digital newspapers becomes a useful means of information in their process of forming inflation expectations. In particular, news with a negative tone exerts greater uncertainty and amplifies the GAP, a positive tone allows improving forecasts, while news with a neutral tone tends to widen the gap.
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