Moral hazard and financial systems: A diachronic study of a corpus of financial texts

Abstract

For many thinkers, language is a communications system used to represent reality without interfering with the message. For others, contrarily, language shapes the message and becomes part of the message; language constitutes the message rather merely representing it. If language is constitutive then changes in the use of certain linguistic artefacts, like the frequency of some single and compound words, will correlate with real world data expressed in other modalities of communication – numbers for instance. We have looked at an iconic term, used frequently during the 2008-financial crisis, moral hazard, in a corpus of newspaper texts comprising 718926 tokens published between 1999-2009. A similar study was conducted on a corpus of papers drawn from four journals of economics and finance. The changes in the use of certain keywords correlate with the changes major stock market indices.