OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Tracking activity in real time with Google Trends

This paper introduces the OECD Weekly Tracker of economic activity for 46 OECD and G20 countries using Google Trends search data. The Tracker performs well in pseudo-real time simulations including around the COVID-19 crisis. The underlying model adds to the previous Google Trends literature in two respects: (1) the data are adjusted for common long-term bias and (2) the data include variables based on both Google Search categories and topics (the latter being a collection of related keywords), thus further exploiting the potential of Google Trends. The paper highlights the predictive power of specific topics, including "bankruptcies", "economic crisis", "investment", "luggage" and "mortgage". Calibration is performed using a neural network that captures non-linear patterns, which are shown to be consistent with economic intuition using machine learning interpretability tools ("Shapley values"). The tracker sheds light on the recent downturn and the dynamics of the rebound, and provides evidence about lasting shifts in consumption patterns.


Keywords: Google Trends, machine learning, COVID-19, high-frequency, interpretability, nowcasting
JEL: C53: Mathematical and Quantitative Methods / Econometric Modeling / Forecasting and Prediction Methods; Simulation Methods; E37: Macroeconomics and Monetary Economics / Prices, Business Fluctuations, and Cycles / Prices, Business Fluctuations, and Cycles: Forecasting and Simulation: Models and Applications; C45: Mathematical and Quantitative Methods / Econometric and Statistical Methods: Special Topics / Neural Networks and Related Topics; C55: Mathematical and Quantitative Methods / Econometric Modeling / Large Data Sets: Modeling and Analysis
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error