Article ID Journal Published Year Pages File Type
5101541 Journal of Monetary Economics 2016 10 Pages PDF
Abstract
The variation in a state-level measure of local economic-policy uncertainty during the 2007-2009 recession matches the cross-sectional distribution of unemployment outcomes in this period. This relationship is robust to numerous controls for other determinants of labor market outcomes. Using preexisting state institutions that amplified uncertainty, we find evidence that this type of local uncertainty played a causal role in increasing unemployment. Together, these results suggest that increased uncertainty contributed to the severity of the Great Recession.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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