 Fluctuations in UncertaintyJournal of Economic Perspectives, 2014, vol. 28, issue 2, 153-76 Abstract: Uncertainty is an amorphous concept. It reflects uncertainty in the minds of consumers, managers, and policymakers about possible futures. It is also a broad concept, including uncertainty over the path of macro phenomena like GDP growth, micro phenomena like the growth rate of firms, and noneconomic events like war and climate change. In this essay, I address four questions about uncertainty. First, what are some facts and patterns about economic uncertainty? Both macro and micro uncertainty appear to rise sharply in recessions and fall in booms. Uncertainty also varies heavily across countries?developing countries appear to have about one-third more macro uncertainty than developed countries. Second, why does uncertainty vary during business cycles? Third, do fluctuations in uncertainty affect behavior? Fourth, has higher uncertainty worsened the Great Recession and slowed the recovery? Much of this discussion is based on research on uncertainty from the last five years, reflecting the recent growth of the literature. JEL-codes: D81 E32 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:aea:jecper:v:28:y:2014:i:2:p:153-76 Ordering information: This journal article can be ordered from Access Statistics for this article Journal of Economic Perspectives is currently edited by Enrico Moretti More articles in Journal of Economic Perspectives from American Economic Association Contact information at EDIRC. |
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