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Alfaro, Iván; Bloom, Nicholas; Lin, Xiaoji - 2018

We show how real and financial frictions amplify the impact of uncertainty shocks. We build a model with real frictions, and find adding financial frictions roughly doubles the impact of uncertainty shocks. Higher uncertainty alongside financial frictions induces the standard real-options...

Persistent link: https://www.econbiz.de/10011895833

Economic Uncertainty Before and During the COVID-19 Pandemic

Altig, David - 2020

We consider several economic uncertainty indicators for the US and UK before and during the COVID-19 pandemic: implied stock market volatility, newspaper-based economic policy uncertainty, twitter chatter about economic uncertainty, subjective uncertainty about future business growth, and...

Persistent link: https://www.econbiz.de/10012481613

COVID-Induced Economic Uncertainty

Baker, Scott R. - 2020

Assessing the economic impact of the COVID-19 pandemic is essential for policymakers, but challenging because the crisis has unfolded with extreme speed. We identify three indicators - stock market volatility, newspaper-based economic uncertainty, and subjective uncertainty in business...

Persistent link: https://www.econbiz.de/10012481939

Business-Level Expectations and Uncertainty

Bloom, Nicholas - 2020

those outcomes. This subjective uncertainty measure correlates positively with financial risk measures. Drawing on the …

Persistent link: https://www.econbiz.de/10012482478

Optimal Taxes on Capital in the OLG Model with Uninsurable Idiosyncratic Income Risk

Krueger, Dirk - 2018

facing uninsurable idiosyncratic labor income risk. The Ramsey government internalizes the general equilibrium feedback of … optimal aggregate saving rate is independent of income risk. The optimal time-invariant tax on capital is increasing in income … risk. Its sign depends on the extent of risk and on the Pareto weight of future generations. If the Ramsey tax rate that …

Persistent link: https://www.econbiz.de/10012453379

The Impact of Uncertainty Shocks

Bloom, Nicholas - 2007

Uncertainty appears to jump up after major shocks like the Cuban Missile crisis, the assassination of JFK, the OPEC I oil-price shock and the 9/11 terrorist attack. This paper offers a structural framework to analyze the impact of these uncertainty shocks. I build a model with a time varying...

Persistent link: https://www.econbiz.de/10012465265

Uncertainty and the Dynamics of R&D

Bloom, Nicholas - 2007

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...

Persistent link: https://www.econbiz.de/10012465815

Measuring Economic Policy Uncertainty

Baker, Scott R. - 2015

We develop a new index of economic policy uncertainty (EPU) based on newspaper coverage frequency. Several types of evidence - including human readings of 12,000 newspaper articles - indicate that our index proxies for movements in policy-related economic uncertainty. Our US index spikes near...

Persistent link: https://www.econbiz.de/10012457036

Fluctuations in Uncertainty

Bloom, Nicholas - 2013

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...

Persistent link: https://www.econbiz.de/10012458949

Does Uncertainty Reduce Growth? Using Disasters as Natural Experiments

Baker, Scott R. - 2013

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 data on stock market levels and volatility as proxies...

Persistent link: https://www.econbiz.de/10012459187