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The Relation Between Macroeconomic Uncertainty And The Expected Performance Of the Economy

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  • Jean Sepulveda-Umanzor

Abstract

By using data from surveys of expectations, it is shown that macroeconomic uncertainty, measured by the standard deviation of the expected output growth, the expected unemployment rate, and the expected inflation rate, is negatively related to the expected performance of the economy, proxied by the expected growth rate of output. That is, forward-looking agents are more uncertain about the future development of output, unemployment, and inflation when the growth rate of output is expected to fall, and they are less uncertain when this growth rate is expected to increase. The findings indicate that macroeconomic polices would have asymmetric effects on output depending upon how economic agents expect the economy to perform in the near future

Suggested Citation

  • Jean Sepulveda-Umanzor, 2004. "The Relation Between Macroeconomic Uncertainty And The Expected Performance Of the Economy," Econometric Society 2004 Latin American Meetings 304, Econometric Society.
    • Handle: RePEc:ecm:latm04:304
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    References listed on IDEAS

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    Cited by:

    1. Mario Quagliariello, 2009. "Macroeconomic uncertainty and banks' lending decisions: the case of Italy," Applied Economics, Taylor & Francis Journals, vol. 41(3), pages 323-336.
    2. Kjellberg, David & Post, Erik, 2007. "A Critical Look at Measures of Macroeconomic Uncertainty," Working Paper Series 2007:14, Uppsala University, Department of Economics.
    3. Stangl, Anna, 2009. "Essays on the Measurement of Economic Expectations," Munich Dissertations in Economics 9823, University of Munich, Department of Economics.

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    More about this item

    Keywords

    Macroeconomic uncertainty; expectations; expected macroeconomic performance;
    All these keywords.

    JEL classification:

    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E39 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Other
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions

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