Inflationary Household Uncertainty Shocks

Wed, 01 Jan 2025 00:00:00 +0000

Research question and motivation: Macro-uncertainty is widely believed to depress activity, but existing measures are tied to financial markets, professional forecasters, or economic policy, while a key transmission channel runs through households’ propensity to consume, save, and work. Direct, macro-usable measures of household uncertainty are scarce. Ambrocio asks whether household uncertainty shocks behave like the negative demand shocks documented for the US (Leduc and Liu, 2016), and finds they do not in Europe.

Gene Ambrocio | Macro Paper Warehouse

Inflationary Household Uncertainty Shocks