The macroeconomic impact of asymmetric uncertainty shocks

Henrik Müller, Boris Blagov, Torsten Schmidt, Jonas Rieger and Carsten Jentsch

The Journal of Economic Asymmetries, 2025, vol. 31, issue C

Abstract: Political shocks impact the economy in different ways, depending of their nature. To capture these effects effectively, we present the Uncertainty Perception Indicator (UPI) based on German newspaper content. This approach combines the time-inherent stability of simple counts of articles with the thematic openness and flexibility of topic models. Using the dynamic RollingLDA technique facilitates the close-to-real-time identification of both the magnitude of an uncertainty shock and its specific characteristics. Hence, the UPI could prove highly useful for economic forecasters and policymakers, since it renders possible more timely and targeted policy reactions.

Keywords: Uncertainty; Topic modeling; Business cycle; Fixed investment; Geoeconomics (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joecas:v:31:y:2025:i:c:s1703494925000106

DOI: 10.1016/j.jeca.2025.e00410

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