Uncertainty Measures and Business Cycles
Evidence From the US
Bibliographic Data
| ID | 16910488 |
|---|---|
| Authors | Haining Chen (0000-0002-7543-3674, Jiangsu University), Prince Asare Vitenu-Sackey (0000-0001-8324-6521, University of Strathclyde, corresponding author), Isaac Akpemah Bathuure (0000-0002-5425-3244, Nanjing Foreign Language School) |
| Year | 2024 |
| Volume | 14 |
| Issue | 2 |
| Publication date | 2024-04-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | SAGE Open (JOURNAL) |
| Journal identifiers | ISSN: 2158-2440 • E-ISSN: 2158-2440 |
| Publisher | SAGE Publications (PUBLISHER • US) |
| DOI | 10.1177/21582440241240620 |
| OpenAlex | W4394719724 |
| Language | EN |
| References cited | 86 |
Most of the macro-literature on uncertainty has focused on macro-uncertainty caused by real activity as a source of economic fluctuations. Economic uncertainty reduces total demand in the economy via a conventional channel that is associated with real option theory. Given the findings of the existing literature, financial uncertainty other than macroeconomic uncertainty matters more for business cycle fluctuations. This study seeks to answer the following questions: Is uncertainty the primary cause of the business cycle’s fluctuations? Alternatively, does it matter what kind of uncertainty exists? The research utilized the generalized linear model (GLM) and the Bayesian generalized linear model (BGLM) to analyze a dataset covering the time from July 1960 to April 2015 in the United States. Elevated levels of macroeconomic uncertainty, akin to real uncertainty, and economic policy uncertainty, as measured by news sources, demonstrate a counter-cyclical pattern in relation to business cycles. Low levels of uncertainty have a positive impact on business cycles, leading to an increase in industrial production. Conversely, high levels of uncertainty have a negative effect on business cycles, causing a decline in industrial output. We are of the opinion that high levels of macroeconomic uncertainty have a ripple effect on the entire economy, which may stifle investments, reduce consumption, and create unemployment, which is likely to influence labor participation. JEL Classification: D81, E23, E32, E44, G14
Business · Econometrics · Economics · Climate Change Policy and Economics · Market Dynamics and Volatility · Monetary Policy and Economic Impact · Psychology
Time Series Analysis
Generalized Linear Models
The Value of Waiting to Invest
Really Uncertain Business Cycles
Irreversibility, Uncertainty, and Cyclical Investment
Uncertainty Shocks in a Model of Effective Demand
On a measure of lack of fit in time series models
Extracting the Variance Inflation Factor and Other Multicollinearity Diagnostics from Typical Regression Results
Uncertainty shocks are aggregate demand shocks
A reinvestigation of EKC model by ecological footprint measurement for high, middle and low income countries
Generalized Linear Models
Measuring Uncertainty
Political uncertainty and risk premia
Uncertainty and Economic Activity
A test for independence based on the correlation dimension
Distribution of the Estimators for Autoregressive Time Series With a Unit Root
Measuring Economic Policy Uncertainty
Testing for a unit root in time series regression
Economic Growth and the Environment
A Simple, Positive Semi-Definite, Heteroskedasticity and Autocorrelation Consistent Covariance Matrix
Investigating Causal Relations by Econometric Models and Cross-spectral Methods
U.S. Economic Uncertainty Shocks and China’s Economic Activities
Is growth of the financial sector relevant for mitigating CO2 emissions in Bangladesh? The moderation role of the financial sector within the EKC model
Recession, Financial Instability, Social Inequality and the Health Crisis
The Sensitivity of Firms' Investment to Uncertainty and Cash Flow
| Citation velocity | historical |
|---|---|
| Highly cited | No |