The State-Level Impact of Uncertainty Shocks

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This paper estimates the impact of uncertainty shocks on real income growth in U.S. states. Our results suggest that the effect is heterogeneous. The magnitude of the decline in income is largest in states with a large share of manufacturing and construction industries, a larger share of small firms, a high fiscal deficit, a less rigid labor market, and a more volatile housing market. In contrast, a higher share of mining industries and larger intergovernmental fiscal transfers ameliorate the impact of uncertainty.
Original languageEnglish
JournalJournal of Money, Credit and Banking
Issue number8
Pages (from-to)1879-1899
Publication statusPublished - 5 Jun 2018

ID: 198655667