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US uncertainty shocks on real and financial markets: A multi-country perspective

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  • Gomez-Gonzalez, Jose E.
  • Hirs-Garzon, Jorge
  • Uribe, Jorge M.

Abstract

The international propagation of uncertainty shocks from the United States is not fully understood, despite extensive literature on domestic effects. This study examines the impact of U.S. financial, macroeconomic, and policy uncertainty on credit growth, stock prices, economic activity, bond yields, and inflation in five major recipients of U.S. foreign investment from 1950 to 2019. Findings highlight the pivotal role of U.S. financial uncertainty in driving global business cycles. Increased uncertainties in the U.S. financial sector negatively affect global economic activity by impeding credit and stock prices, limiting funding opportunities for firms and households worldwide. This underscores the significant influence of U.S. financial markets on global economic fluctuations.

Suggested Citation

  • Gomez-Gonzalez, Jose E. & Hirs-Garzon, Jorge & Uribe, Jorge M., 2024. "US uncertainty shocks on real and financial markets: A multi-country perspective," Economic Systems, Elsevier, vol. 48(3).
    • Handle: RePEc:eee:ecosys:v:48:y:2024:i:3:s0939362524000025
    DOI: 10.1016/j.ecosys.2024.101180
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    More about this item

    Keywords

    Macroeconomic uncertainty; Financial uncertainty; Credit markets; Funding; Global business cycles;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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