publication . Article . 2017

Investments and uncertainty revisited: the case of the US economy

Degiannakis, S.; Filis, George; Palaidimos, G.;
Open Access
  • Published: 29 Jan 2017 Journal: Applied Economics, volume 49, pages 4,521-4,529 (issn: 0003-6846, eissn: 1466-4283, Copyright policy)
  • Publisher: Informa UK Limited
  • Country: United Kingdom
Abstract
This paper examines the relationship between investments and uncertainty for the US economy, as the latter is approximated by consumer sentiment, purchasing managers’ prospects and economic policy uncertainty. Contrary to the existing literature, we provide evidence that this relationship is time-varying. The time variation is attributed to the observed temporal replacement effect between private and public investments. Furthermore, we show that there are two distinct correlation regimes in this relationship and unless we concentrate on the two regimes, we cannot fully unravel the real link between uncertainty and investments. Finally, we examine whether the use...
Subjects
free text keywords: Financial economics, Gross fixed capital formation, Purchasing, Macroeconomics, Consumer confidence index, Labour economics, Economics, Economy
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