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Estimating the e ects of uncertainty over the business cycle ∗ First Draft
| Content Provider | Semantic Scholar |
|---|---|
| Author | Bonciani, Dario |
| Copyright Year | 2015 |
| Abstract | In this paper I provide empirical evidence that uncertainty shocks have strong asymmetric e ects on economic activity depending on the phase of the business cycle. In particular, the impulse responses estimated with the local projection method on a smooth-transition model show that in recessions uncertainty shocks strongly dampen industrial production, increase unemployment and reduce prices. In an expansion the e ects are reversed, and uncertainty shocks appear to have positive macroeconomic e ects. One possible explanation is that during expansions uncertainty fosters investments and economic activity through the "growth options" channel, while in recessions it reduces investments via the "wait-and-see" channel. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://mpra.ub.uni-muenchen.de/65921/1/MPRA_paper_65921.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
