Measuring Economic Uncertainty and Its Effects
The Economic Record, 2017, vol. 93, issue 303, 550-575
I construct a monthly index of economic uncertainty for Australia. Economic uncertainty rose to historically high levels during the financial crisis and remained elevated until late 2013. The index is: higher around recessions, elections, monetary policy surprises and some major events; tends to increase faster than it decreases; and is driven by both domestic and foreign factors. I use the index to assess how uncertainty affects the Australian economy. Consistent with the â€˜real optionsâ€™ channel of uncertainty, I find that it reduces investment and employment growth. Similarly, uncertainty raises the household saving ratio, consistent with the â€˜precautionary savingsâ€™ channel.
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
Working Paper: Measuring Economic Uncertainty and Its Effects (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:ecorec:v:93:y:2017:i:303:p:550-575
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0013-0249
Access Statistics for this article
The Economic Record is currently edited by Paul Miller, Glenn Otto and Martin Richardson
More articles in The Economic Record from The Economic Society of Australia Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().