This paper investigates whether the effects of uncertainty shocks on the French economy are heterogeneous. By exploiting two different measures of uncertainty, one reflecting policy uncertainty and another one reflecting financial uncertainty, I find important discrepancies in the responses of French macro-variables. In particular, consumption and employment do not respond significantly to a financial uncertainty shock while they significantly decrease after a policy uncertainty shock. Furthermore, in contrast to policy uncertainty, financial uncertainty is not a major driver of business cycles fluctuations in France. This result is in stark contrast with the empirical evidence based on U.S. data, for which regardless its origins uncertainty impedes economic activity in a similar fashion

Idriss Fontaine (idriss.fontaine@u-cergy.fr)
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Idriss Fontaine: University of Cergy-Pontoise - THEMA

Economics Bulletin, 2017, vol. 37, issue 4, 2835-2845

Keywords: Policy uncertainty; Financial uncertainty; France; Macroeconomic fluctuations (search for similar items in EconPapers)
JEL-codes: E2 E3 (search for similar items in EconPapers)
Date: 2017-12-04
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