A growing body of evidence suggests that uncertainty is counter cyclical, rising sharply in recessions and falling in … booms. But what is the causal relationship between uncertainty and growth? To identify this we construct cross country panel …

This review article tries to answer four questions: (i) what are the stylized facts about uncertainty over time; (ii …) why does uncertainty vary; (iii) do fluctuations in uncertainty matter; and (iv) did higher uncertainty worsen the Great … Recession of 2007-2009? On the first question both macro and micro uncertainty appears to rise sharply in recessions. On the …

ideological divide, the US seems destined to heightened levels of policy uncertainty for many years to come. Some research … suggests that such uncertainty, particularly over economic policy, partly explains the sluggish nature of the recovery in … America - and - according to one recent study, restoring policy uncertainty to levels that prevailed before the financial …

We propose uncertainty shocks as a new shock that drives business cycles. First, we demonstrate that microeconomic … uncertainty is robustly countercyclical, rising sharply during recessions, particularly during the Great Recession of 2007 …-2009. Second, we quantify the impact of time-varying uncertainty on the economy in a dynamic stochastic general equilibrium model …

Uncertainty appears to vary strongly over time, temporarily rising by up to 200% around major shocks like the Cuban … Missile crisis, the assassination of JFK and 9/11. This paper offers the first structural framework to analyze uncertainty …. The parameterized model is then used to simulate a macro uncertainty shock, which produces a rapid drop and rebound in …

Uncertainty varies strongly over time, rising by 50% to 100% in recessions and by up to 200% after major economic and … political shocks. This paper shows that higher uncertainty reduces the responsiveness of R&D to changes in business conditions … - a "caution-effect" - making it more persistent over time. Thus, uncertainty will play a critical role in shaping the …

households reacted to the increase in uncertainty about the future path of income that such an event produced. Our estimates are …

This paper shows that, with (partial) irreversibility, higher uncertainty reduces the impact effect of demand shocks on … investment. Uncertainty increases real option values making firms more cautious when investing or disinvesting. This is confirmed … both numerically for a model with a rich mix of adjustment costs, time-varying uncertainty, and aggregation over investment …