The Relation Between Macroeconomic Uncertainty And The Expected Performance Of the Economy
AbstractBy using data from surveys of expectations, it is shown that macroeconomic uncertainty, measured by the standard deviation of the expected output growth, the expected unemployment rate, and the expected inflation rate, is negatively related to the expected performance of the economy, proxied by the expected growth rate of output. That is, forward-looking agents are more uncertain about the future development of output, unemployment, and inflation when the growth rate of output is expected to fall, and they are less uncertain when this growth rate is expected to increase. The findings indicate that macroeconomic polices would have asymmetric effects on output depending upon how economic agents expect the economy to perform in the near future
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Date of creation: 11 Aug 2004
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Macroeconomic uncertainty; expectations; expected macroeconomic performance;
Find related papers by JEL classification:
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
- E39 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Other
- E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
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