Seminar den 19. maj 2014

"The Impact of Uncertainty Shocks" Revisited: The Role of Nonlinearities

Abstract
We show that the drop and rebound in real economic activity due to heightened uncertainty documented by Bloom (2009) is present, and magnified, only in recessions. Use of linear models leads to a severe underestimation of the real costs of uncertainty.

Contacts: Battista Severgnini and Cédric Schneider