Industrial Impact of Economic Uncertainty Shocks in Australia: Revised

Hamish Burrel and Joaquin Vespignani

MPRA Paper from University Library of Munich, Germany

Abstract: Understanding the impact of economic uncertainty shocks at the industrial disaggregated level is critical for both fiscal and monetary policy response to economic uncertainty shocks. We estimate an SVAR model using quarterly Australian data from 1987:2 to 2018:4. The results of this paper emphasise that individual industries have unique responses to economic uncertainty shocks and do not necessarily reflect the response of the broader aggregate macroeconomy. We found the following stylized facts; i) The construction industry is the most negatively impacted industry by an economic uncertainty shock in terms of investment, output and employment in Australia; ii) The financial and insurance services industry also endures a substantial decline to these shocks, particularly on investment and employment indicators; iii) Economic uncertainty is shown to have less impact on the mining, health care and social assistance and public administration and safety industry, where the government plays a significant role.

Keywords: Economic Uncertainty; Economic Uncertainty Shocks; SVAR; Australian economy; Australian Industries (search for similar items in EconPapers)
JEL-codes: E00 E02 E1 (search for similar items in EconPapers)
Date: 2020-06-01
New Economics Papers: this item is included in nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:104117

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