Does uncertainty affect real activity? Evidence from state-level data

Haroon Mumtaz

Economics Letters, 2018, vol. 167, issue C, 127-130

Abstract: We use variation in the effect of US-wide or global uncertainty on state-level uncertainty to identify the impact of this shock on real activity. We find that increases in uncertainty do have an adverse impact on real income, employment and unemployment. Thus, uncertainty shocks can be a source of economic fluctuations.

Keywords: Uncertainty shocks; Instrumental variables; US states (search for similar items in EconPapers)
JEL-codes: C11 C2 E3 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (36)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:167:y:2018:i:c:p:127-130

DOI: 10.1016/j.econlet.2018.03.026

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