Measuring Economic Uncertainty and Its Effects.

• Autores: Angus Moore
• Localización: Economic record, ISSN 0013-0249, Vol. 93, Nº. 303, 2017, págs. 550-575
• Idioma: inglés
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• Resumen

  • 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]