Olivier Coibion, Yuriy Gorodnichenko, Saten Kumar
Increased uncertainty is a recent, promising explanation for business cycle fluctuations, but identifying a causal relationship is challenging because changes in uncertainty are often correlated with changes in expected outcomes. This column uses a randomised control trial, providing firms in New Zealand with different amounts of information on the economy, to isolate the causal effect of uncertainty. Higher macroeconomic uncertainty causes firms to reduce their prices, employment, and investment relative to prior plans, and these effects are economically significant. This suggests a role for policymakers to reduce uncertainty through communication to stabilise the economy.
Πηγή: Voxeu