Kozeniauskas, Nicholas, Veldkamp, Laura, (2017), “Unusual outcomes and uncertain times”, VoxEu, 3 January
Uncertainty shocks are a major avenue of research in the quest to explain business cycles, as well as asset prices and financial crises. This column argues that three conceptually distinct types of uncertainty that are often modelled independently – ‘macro’ uncertainty about an aggregate variable such as GDP, ‘micro’ uncertainty about firms’ individual outcomes, and ‘higher-order’ uncertainty that people have about the beliefs of others – are in fact related because all three are tied to disaster risk.
Relevant Posts
- European Central Bank, (2016), “The impact of uncertainty on activity in the euro area”, ECB, 19 December
- Rossi, Barbara, Sekhposyan, Tatevik, Soupre, Mattheiu, (2016), “Understanding the Sources of Macroeconomic Uncertainty”, Center for Economic Policy Research, July
