ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

UncertaintySubscribe to Uncertainty

Time-varying Effect of Inflation Uncertainty

Inflation remains a major concern for every economy. High inflation is generally believed to be costly because it makes the price mechanism a less effective apparatus in allocating resources efficiently (Friedman 1977). One of the most remarkable macroeconomic developments over the past two decades...

Uncertainty in Climate Science

In May 2018, multiple extreme weather events claimed scores of lives, damaged property and brought public life to a standstill in parts of India. In the aftermath of these events, a blame game ensued with some assigning responsibility to scientific and state agencies, and others calling for more research and accurate weather forecasts. It is important to recognise the uncertainties in climate science and embrace them in order to channel resources appropriately, attribute causality, build public trust, and improve policy effectiveness.

Economic Policy Uncertainty and Growth in India

A measure of economic policy uncertainty or EPU for India is constructed to study its impact on the economy. It is found that gross domestic product growth and fixed investment are negatively related to EPU in India. For instance, if the economic uncertainty were to decrease to the level observed in 2005, India's GDP growth would increase by 0.56%, and fixed investment growth would increase by 1.36%. Additionally, a negative correlation between the Bombay Stock Exchange index and EPU in India is observed, suggesting that increases in EPU lower expectations of future growth or increase perceived risk of listed stocks. Lastly, it is found that firm-level capital expenditure rates are lowered when EPU increases.
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