Is there any way to blame business cycles *on the media*?

Let’s try!  Here is a new paper in the new American Economic Review, by Ryan Chahrour, Kristoffer Nimark and Stefan Pitschner, here is the abstract:

We formalize the editorial role of news media in a multisector economy and show that media can be an independent source of business cycle fluctuations, even when they report accurate information. Public reporting about a subset of sectoral developments that are newsworthy but unrepresentative causes firms across all sectors to hire too much or too little labor. We construct historical measures of US sectoral news coverage and use them to calibrate our model. Time-varying media focus generates demand-like fluctuations that are orthogonal to productivity, even in the absence of non-TFP shocks. Presented with historical sectoral productivity, the model reproduces the 2009 Great Recession.

The piece is called “Sectoral Media Focus and Aggregate Fluctuations.”  Since real estate prices have more than bounced back from the 2006 peak in most areas, is this idea really so crazy?