Economic Policymakers’ Uncertainty
Speaker(s)Stephen Hansen (University of Oxford, United Kingdom)
FieldOrganizations and Markets
Date and time
May 13, 2019
12:00 - 13:00
AbstractThere is increasing evidence that policy uncertainty affects the real economy. We ask: what is the source of this uncertainty? Policy uncertainty can either arise from policymakers’ reacting to uncertain economic conditions, or from policymakers’ deviating more from their typical policy rule. We construct a novel measure of attention to different aspects of the policy decision at the Federal Reserve, and from it derive uncertainty indices on different dimensions. Preliminary results indicate that a large part of the real economy reaction to policy uncertainty arises from publicly communicated uncertainty about economic conditions.