IDEAS home Printed from https://ideas.repec.org/a/bpj/sndecm/v29y2025i4p447-467n1004.html
   My bibliography  Save this article

Monetary Policy Uncertainty in the United States and Investment Sentiment in Advanced Economies

Author

Listed:
  • Azad Nahiyan Faisal

    (Department of Economics, University of Wisconsin – Parkside, Kenosha, WI 53144, USA)

  • Serletis Apostolos

    (Department of Economics, University of Calgary, Calgary, Alberta T2N 1N4, Canada)

Abstract

How does uncertainty originating from the future path taken by monetary policy enacted by the Federal Reserve in the United States affect the business confidence in other advanced economies? Does US monetary policy uncertainty affect economic activity in the United States and in Canada, France, Germany, Italy, Japan, and the United Kingdom. Motivated to answer these questions, we use monthly data and a bivariate GARCH-in-Mean VAR model. We also use a multivariate structural VAR model and a different measure of US monetary policy uncertainty, achieving identification by a combination of short-run and long-run restrictions. Our evidence shows that US monetary policy uncertainty, irrespective of how it is measured, has negative effects on the business confidence and output in the advanced G7 economies.

Suggested Citation

  • Azad Nahiyan Faisal & Serletis Apostolos, 2025. "Monetary Policy Uncertainty in the United States and Investment Sentiment in Advanced Economies," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 29(4), pages 447-467.
    • Handle: RePEc:bpj:sndecm:v:29:y:2025:i:4:p:447-467:n:1004
    DOI: 10.1515/snde-2023-0108
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/snde-2023-0108
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/snde-2023-0108?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:sndecm:v:29:y:2025:i:4:p:447-467:n:1004. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyterbrill.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.