Macroeconomic Uncertainty in Disruptive Times

Stjepanović Saša () and Tomić Daniel ()
Additional contact information
Stjepanović Saša: Juraj Dobrila University of Pula, Faculty of economic and tourism “Dr. Mijo Mirković”, Pula, Croatia
Tomić Daniel: Juraj Dobrila University of Pula, Faculty of economic and tourism “Dr. Mijo Mirković”, Pula, Croatia

Proceedings of the International Conference on Business Excellence, 2025, vol. 19, issue 1, 929-943

Abstract: In a modern world characterized by frequent economic shocks, technological disruptions, and geopolitical uncertainty, it is imperative that policymakers, businesses, and investors understand macroeconomic uncertainty. This paper tracks macroeconomic uncertainty over the years in some EU countries from 1997-2024 using a data set that includes economic policy uncertainty indices, GDP growth rates, inflation, interest rates and labor market dynamics. We use VAR models and impulse response functions to study the effects of uncertainty shocks on macroeconomic aggregates. We find that there is considerable variation in how EU economies react to uncertainty, with small and open economies being more volatile. Also, we investigate how various economic crises like the global financial crisis of 2008, the eurozone debt crisis, COVID-19, and the current geopolitical tensions have increased uncertainty and changed the transmission mechanisms of macroeconomic shocks. Combining the findings from behavioral economics, we review the role of decision-making biases in economic forecasting and policy making. This paper presents evidence on the trends and consequences of macroeconomic uncertainty over the long-run and recommends policies to change effects and enhance economic opportunities in an environment of growing economic uncertainty.

Keywords: Macroeconomic uncertainty; EU economies; economic policy uncertainty; vector autoregression; behavioral biases; economic crises; policy responses (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/picbe-2025-0073 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vrs:poicbe:v:19:y:2025:i:1:p:929-943:n:1009

DOI: 10.2478/picbe-2025-0073

Access Statistics for this article

Proceedings of the International Conference on Business Excellence is currently edited by Alina Mihaela Dima

More articles in Proceedings of the International Conference on Business Excellence from Sciendo
Bibliographic data for series maintained by Peter Golla ().