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Uncertainty And Its Impact On The Mexican Economy

Author

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  • Horacio Catalán Alonso

    (Universidad Nacional Autónoma de México.)

Abstract

This paper investigates the impact of uncertainty on mexican economic. The index of economic policy uncertainty (EPU), created by Baker, Bloom and Davis (2016), is used as a proxy variable of uncertainty. These proxies include: newspaper-based measures of uncertainty for mexico since january 1996 to february 2019. The interaction between economic activity and shocks of uncertainty is estimated through vector autoregression (VAR) and impulse-response function. The analysis shows that a shock of uncertainty the price level and interest rate rises, and reduced investment and employment. These results are consistent with other studies that show that uncertainty tends to reduce the level of Economic activity in the short run.

Suggested Citation

  • Horacio Catalán Alonso, 2019. "Uncertainty And Its Impact On The Mexican Economy," Economia Coyuntural,Revista de temas de perspectivas y coyuntura, Instituto de Investigaciones Economicas y Sociales 'Jose Ortiz Mercado' (IIES-JOM), Facultad de Ciencias Economicas, Administrativas y Financieras, Universidad Autonoma Gabriel Rene Moreno, vol. 4(4), pages 41-67.
    • Handle: RePEc:grm:ecoyun:201911
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    File URL: https://files.uagrm.edu.bo/entidad/161/file/indexed/repec/grm/ecoyun/201911.pdf
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    More about this item

    Keywords

    Uncertainty shocks; economic policy uncertainty index; investment.;
    All these keywords.

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)

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