Uncertainty, perception and the Internet

Arbeitspapier

Macroeconomic uncertainty consists of three components: the unobservable, the heterogeneous and the "uncertain". We are unaware of exactly when economic agents perceive uncertainty and which type of uncertainty interests them. This paper introduces and outlines a way of conducting large-scale data searches on the Web. We create the EURQ index of "economic uncertainty related queries" for both the USA and Italy. We show that the EURQ encapsulates agents' need to gather more information during periods of uncertainty. This need either spontaneously arises in the case of macro-real and political uncertainty, or is induced by the media in the case of normative and financial uncertainty. This distinction is extremely important when trying to understand the immediate impact of fiscal policy uncertainty on economic variables, and how financial shocks can produce a significant short-term impact on economic activity. It is also helpful when trying to solve the identification and endogeneity issues encountered in the literature when assessing the role of uncertainty.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Quaderni - Working Paper DSE ; No. 1134

Classification and Topics

• Classification: Wirtschaft ; Information, Knowledge, and Uncertainty: General ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; General Outlook and Conditions ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models ; Fiscal Policies and Behavior of Economic Agents: General
• Subject: macroeconomic uncertainty measurement ; perception of uncertainty ; Internet searches ; GoogleTrends ; finance-based indexes ; survey-based indexes ; news-based indexes

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bontempi, Maria Elena ; Frigeri, Michele ; Golinelli, Roberto ; Squadrani, Matteo
• Event: Veröffentlichung
• (who): Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
• (where): Bologna
• (when): 2019

Further information

• DOI: doi:10.6092/unibo/amsacta/6254
• Handle: http://hdl.handle.net/10419/213531
• Last update: 10.03.2025, 11:41 AM CET