Agreed and Disagreed Uncertainty

Luca Gambetti, Dimitris Korobilis, John D. Tsoukalas and Francesco Zanetti

Working Papers from Business School - Economics, University of Glasgow

Abstract: Weformalize two novel concepts of uncertainty in a model of imperfect and dispersed information: agreed and disagreed uncertainty. We show that consumer disagreement significantly shapes the effect of uncertainty on economic activity. Episodes of elevated uncertainty accompanied by high consumer disagreement (disagreed uncertainty) do not exert negative effects on economic activity. In contrast, episodes of high uncertainty with low consumer disagreement (agreed uncertainty) lead to substantial economic contractions. These results challenge the conventional view that uncertainty invariably triggers recessions. We establish these findings using both time-series and micro-survey panel methods.

Keywords: Uncertainty; information frictions; disagreement; Bayesian vector autoregression (VAR); sign restrictions. (search for similar items in EconPapers)
JEL-codes: E20 E32 E43 E52 (search for similar items in EconPapers)
Date: 2025-02
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https://www.gla.ac.uk/media/Media_1152143_smxx.pdf (application/pdf)

Related works:
Working Paper: Agreed and Disagreed Uncertainty (2023)
Working Paper: Agreed and Disagreed Uncertainty (2023)
Working Paper: Agreed and Disagreed Uncertainty (2023)
Working Paper: Agreed and Disagreed Uncertainty (2023)
Working Paper: Agreed and Disagreed Uncertainty (2023)
Working Paper: Agreed and Disagreed Uncertainty (2023)
Working Paper: Agreed and Disagreed Uncertainty (2023)
Working Paper: Agreed and Disagreed Uncertainty (2023)
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