The industrial impact of economic uncertainty shocks in Australia
Hamish Burrell () and
Joaquin Vespignani ()
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Hamish Burrell: Tasmanian School of Business & Economics, University of Tasmania, http://www.utas.edu.au/business-and-economics
No 2019-08, Working Papers from University of Tasmania, Tasmanian School of Business and Economics
This study establishes the first empirical evidence of the impact of economic uncertainty shocks on industry-level investment, output and employment in Australia. We find the Construction and Financial and Insurance Services industries are the most impacted by a shock to economic uncertainty. Statistically significant declines are observed for investment, output and employment in the Construction industry, and in terms of magnitude, the declines in output and employment are the largest across all industries studied. Likewise, the Financial and Insurance Services industry experiences declines across investment, output and employment, and undergoes the largest decline in investment in comparison to all other industries examined. Economic uncertainty explains the most substantial portion of the variation in Financial and Insurance Services investment and output, highlighting the detrimental effect it has on the Financial and Insurance Services industry. Furthermore, Health Care and Social Assistance output and Professional, Scientific and Technical Services investment experience considerable declines, and in contrast, Public Administration and Safety is shown to be the least impacted industry.
Keywords: economic uncertainty; economic uncertainty shocks; SVAR; Australian economy; Australian industries (search for similar items in EconPapers)
JEL-codes: C10 C32 E00 E30 (search for similar items in EconPapers)
Pages: 50 pages
New Economics Papers: this item is included in nep-ias, nep-mac and nep-rmg
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Published by the University of Tasmania. Discussion paper 2019-08
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Working Paper: The industrial impact of economic uncertainty shocks in Australia (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:tas:wpaper:32142
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