Does uncertainty affect real activity? Evidence from state-level

Haroon Mumtaz

No 844, Working Papers from Queen Mary University of London, School of Economics and Finance

Abstract: We use variation in the effect of US-wide or global uncertainty on state-level uncertainty to identify the impact of this shock on real activity. We nd that increases in uncertainty do have an adverse impact on real income, employment and unemployment. Thus, uncertainty shocks can be a source of economic fluctuations.

Keywords: Uncertainty shocks; Instrumental variables; US states (search for similar items in EconPapers)
JEL-codes: C15 C32 E32 (search for similar items in EconPapers)
Date: 2017-12-25
New Economics Papers: this item is included in nep-hrm
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Persistent link: https://EconPapers.repec.org/RePEc:qmw:qmwecw:844

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