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The Impact of Uncertainty Shocks on the UK Economy, Stephanie Denis, Prakash Kannan

This paper quantifies the economic impact of uncertainty shocks in the UK using data that span the recent Great Recession. We find that uncertainty shocks have a significant impact on economic activity in the UK, depressing industrial production and GDP. The peak impact is felt fairly quickly at around 6-12 months after the shock, and becomes statistically negligible after 18 months. Interestingly, the impact of uncertainty shocks on industrial production in the UK is strikingly similar to that of the US both in terms of the shape and magnitude of the response. However, unemployment in the UK is less affected by uncertainty shocks. Finally, we find that uncertainty shocks can account for about a quarter of the decline in industrial production during the Great Recession
Table Of Contents
Cover; Abstract; Contents; I. Introduction; II. Measures of Uncertainty; III. Baseline VAR Model; IV. Robustness Tests; A. Introducing average GDP Forecasts; B. Changing Number of Lags; C. Switching the order of variables; V. Are Uncertainty Shocks More Important than Monetary Policy Shocks?; VI. Are Uncertainty Shocks Larger in the UK vs. the US?; VII. The Impact of Uncertainty Shocks During the Great recession; VIII. Conclusion; IX. References; X. Tables; XI. Figures
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (26 p.)
Specific Material Designation
Form Of Item

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