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Measuring economic uncertainty using the Survey of Professional Forecasters


  • Keith Sill


Uncertainty about how the economy will evolve is a key concern for households and firms. People’s views on how likely it is that the economy will be growing, stagnating, or in recession help shape the actions they take today. Consequently, how households and firms respond to uncertainty has implications for economic activity. In addition, uncertainty matters to policymakers: Monetary policymakers recognize that if uncertainty about future inflation is high, decision-making by households and firms becomes more complicated. In this article, Keith Sill describes how uncertainty can be measured using data from the Survey of Professional Forecasters and shows how these measures have changed over time for output growth and inflation. He also examines some links between the macroeconomy and measures of output and inflation uncertainty.

Suggested Citation

  • Keith Sill, 2012. "Measuring economic uncertainty using the Survey of Professional Forecasters," Business Review, Federal Reserve Bank of Philadelphia, issue Q4, pages 16-27.
  • Handle: RePEc:fip:fedpbr:y:2012:i:q4:p:16-27

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    References listed on IDEAS

    1. Deaton, Angus, 1991. "Saving and Liquidity Constraints," Econometrica, Econometric Society, vol. 59(5), pages 1221-1248, September.
    2. Gianna Boero & Jeremy Smith & KennethF. Wallis, 2008. "Uncertainty and Disagreement in Economic Prediction: The Bank of England Survey of External Forecasters," Economic Journal, Royal Economic Society, vol. 118(530), pages 1107-1127, July.
    3. Christopher D. Carroll, 1997. "Buffer-Stock Saving and the Life Cycle/Permanent Income Hypothesis," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 1-55.
    4. Pablo Guerron-Quintana, 2012. "Risk and uncertainty," Business Review, Federal Reserve Bank of Philadelphia, issue Q1, pages 9-18.
    5. Bomberger, William A, 1996. "Disagreement as a Measure of Uncertainty," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(3), pages 381-392, August.
    6. R?diger Bachmann & Steffen Elstner & Eric R. Sims, 2013. "Uncertainty and Economic Activity: Evidence from Business Survey Data," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(2), pages 217-249, April.
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    Cited by:

    1. Maritta Paloviita & Matti Viren, 2014. "Inflation and output growth uncertainty in individual survey expectations," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 41(1), pages 69-81, February.
    2. Paloviita, Maritta & Virén, Matti, 2014. "Analysis of forecast errors in micro-level survey data," Research Discussion Papers 8/2014, Bank of Finland.
    3. Hur, Joonyoung & Kim, Insu, 2017. "Inattentive agents and disagreement about economic activity," Economic Modelling, Elsevier, vol. 63(C), pages 175-190.
    4. Plante, Michael D. & Richter, Alexander & Throckmorton, Nathaniel, 2014. "The zero lower bound and endogenous uncertainty," Working Papers 1405, Federal Reserve Bank of Dallas.

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    Uncertainty ; Economic forecasting;


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