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How do households respond to economic policy uncertainty? Evidence from China

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  • Yongwei Chen
  • Dahai Fu
  • Ying Zhang

Abstract

This article empirically examines the impacts of economic policy uncertainty (EPU) on household income and how they adjust their consumption expenditure and savings using a newly developed provincial EPU index in China. The findings show that the uncertainty shock lowers household income and households primarily responded by reducing their non-durable spending. The impacts of uncertainty shock are more pronounced in older, male-headed and urban households.

Suggested Citation

  • Yongwei Chen & Dahai Fu & Ying Zhang, 2022. "How do households respond to economic policy uncertainty? Evidence from China," Applied Economics Letters, Taylor & Francis Journals, vol. 29(1), pages 80-83, January.
    • Handle: RePEc:taf:apeclt:v:29:y:2022:i:1:p:80-83
    DOI: 10.1080/13504851.2021.1971615
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    Cited by:

    1. Zhu, Zhaobo & Lin, Hang & Chen, Min & Han, Peiwen, 2023. "The spillover effect of economic policy uncertainty: Evidence from analyst behaviors in Hong Kong," Finance Research Letters, Elsevier, vol. 52(C).
    2. Xiangyuan Meng & Haoge Guo & Jie Li, 2023. "Economic policy uncertainty and corporate investment: evidence from China," Economic Change and Restructuring, Springer, vol. 56(6), pages 4491-4529, December.

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