The Cost of Uncertainty

Carlos Esteban Posada ()
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Carlos Esteban Posada: Universidad EAFIT

No 4, Documentos de Trabajo de Valor Público from Universidad EAFIT

Abstract: The traditional and most common view of economists on the issue of (bad) uncertainty and its effects has been one of partial equilibrium. When the topic is approached from a macroeconomic perspective, the most frequent has been the examination of the effects of uncertainty shocks on short-term dynamics with various methods, but mainly with neoKeynesian and statistical (vector autoregressive) models. This document responds to another concern and has two objectives: 1) to reflect on this issue with some instruments of the macroeconomist´s toolbox related to a medium or long-term horizon, and 2) report a ciphering of the social cost of uncertainty in the Colombian case.

Keywords: Interest rate; Investment; Output growth rate; Risk; Savings; Uncertainty (search for similar items in EconPapers)
JEL-codes: E13 E14 E21 E24 E27 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2024-09-26
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Persistent link: https://EconPapers.repec.org/RePEc:col:000122:000004

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