Agreed and disagreed uncertainty: Rethinking the macroeconomic impact of uncertainty
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The conventional wisdom is that uncertainty leads to economic contractions, but recent evidence challenges this assumption. This column introduces two novel concepts of uncertainty – agreed and disagreed uncertainty. It shows that when uncertainty is accompanied by widespread consumer disagreement about economic conditions (disagreed uncertainty), the economy remains stable despite the elevated uncertainty. In contrast, when uncertainty coincides with low consumer disagreement (agreed
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