Macroeconomic uncertainty and firms’ investment in China

Zhuozhao Feng and Juan Lin

Economics Letters, 2023, vol. 226, issue C

Abstract: This paper constructs macroeconomic uncertainty indices for China from 2009 to 2021 based on the distribution of forecast errors of major macroeconomic variables. The indices effectively capture the economy’s deep slump and rebound in 2020. This study reveals a negative relationship between macroeconomic uncertainty and firms’ investment, with downside uncertainty having a larger negative impact than upside uncertainty.

Keywords: Downside macroeconomic uncertainty; Upside macroeconomic uncertainty; COVID-19 outbreak; Firms’ investment (search for similar items in EconPapers)
JEL-codes: C30 D80 F40 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:226:y:2023:i:c:s0165176523001209

DOI: 10.1016/j.econlet.2023.111095

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