What can we learn about news shocks from the late 1990s and early 2000s boom-bust period?

The major boom-bust period of 1997–2003 is commonly viewed as an expectations-driven episode in which overly optimistic expectations about information and communications technology were followed by their downward revision. This paper employs a novel approach to identifying the news shocks of this period that restricts the identified shock to have its maximal three-year moving average of realizations in the 1997–1999 boom period, followed by a negative average in the bust period. I provide robust evidence that this shock raises output, hours, investment, and consumption, and accounts for the majority of their business cycle variation.