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Measuring Economic Uncertainty and Its Effects.
- Source :
- Economic Record; Dec2017, Vol. 93 Issue 303, p550-575, 26p, 5 Charts, 19 Graphs, 1 Map
- Publication Year :
- 2017
-
Abstract
- I construct a monthly index of economic uncertainty for Australia. Economic uncertainty rose to historically high levels during the financial crisis and remained elevated until late 2013. The index is: higher around recessions, elections, monetary policy surprises and some major events; tends to increase faster than it decreases; and is driven by both domestic and foreign factors. I use the index to assess how uncertainty affects the Australian economy. Consistent with the 'real options' channel of uncertainty, I find that it reduces investment and employment growth. Similarly, uncertainty raises the household saving ratio, consistent with the 'precautionary savings' channel. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 00130249
- Volume :
- 93
- Issue :
- 303
- Database :
- Complementary Index
- Journal :
- Economic Record
- Publication Type :
- Academic Journal
- Accession number :
- 126564558
- Full Text :
- https://doi.org/10.1111/1475-4932.12356