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Agreed and Disagreed Uncertainty

Luca Gambetti, Dimitris Korobilis, John Tsoukalas, Francesco Zanetti

arXiv 3 Feb 2023 · Econometrics · 5 citations (OpenAlex)

arXiv:2302.01621 · PDF · DOI · OpenAlex · Extracted main text

Abstract

When agents' information is imperfect and dispersed, existing measures of macroeconomic uncertainty based on the forecast error variance have two distinct drivers: the variance of the economic shock and the variance of the information dispersion. The former driver increases uncertainty and reduces agents' disagreement (agreed uncertainty). The latter increases both uncertainty and disagreement (disagreed uncertainty). We use these implications to identify empirically the effects of agreed and disagreed uncertainty shocks, based on a novel measure of consumer disagreement derived from survey expectations. Disagreed uncertainty has no discernible economic effects and is benign for economic activity, but agreed uncertainty exerts significant depressing effects on a broad spectrum of macroeconomic indicators.

Citation extraction

52
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distinct cited
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Jurado, K., Ludvigson, S. C., and Ng, S (2015) Measuring uncertainty0.95315687%
2Bloom, N (2009) The impact of uncertainty shocks0.9416383%
3Baker, S., Bloom, N., and Steven, D (2016) Measuring economic policy uncertainty0.9285480%
4Ludvigson, S. C., Ma, S., and Ng, S (2021) Uncertainty and business cycles: Exogenous impulse or endogenous response0.8746367%
5Bachmann, R., Elstner, S., and Sims, E. R (2013) Uncertainty and economic activity: Evidence from business survey data0.8558562%
6Gilchrist, S., Sim, J., and Zakrajsek, E (2014) Uncertainty, financial frictions and investment dynamics0.6443267%
7Berger, D., Dew-Becker, I., and Giglio, S (2020) Uncertainty shocks as second-moment news shocks0.64422100%
8Shannon, C. E (1948) A mathematical theory of communication0.64422100%
9Korobilis, D (2022) A new algorithm for structural restrictions in Bayesian vector autoregressions self0.6066233%
10Basu, S. and Bundick, B (2017) Uncertainty shocks in a model of effective demand0.5112250%

Showing the top 10 of 52 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Large structural VARs with multiple linear shock and impact inequality restrictions0.40511