Uncertainty, Perception and the Internet

Bontempi, Maria Elena and Frigeri, Michele and Golinelli, Roberto and Squadrani, Matteo (2019) Uncertainty, Perception and the Internet. Bologna: Dipartimento di Scienze economiche, p. 93. DOI 10.6092/unibo/amsacta/6254. In: Quaderni - Working Paper DSE (1134). ISSN 2282-6483.
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Abstract

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.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Bontempi, Maria ElenaUniversità di Bologna0000-0001-9633-3499
Frigeri, MicheleUniversità di Bologna
Golinelli, RobertoUniversità di Bologna0000-0003-1107-6417
Squadrani, MatteoUniversità di Bologna
Keywords
macroeconomic uncertainty measurement; perception of uncertainty; Internet searches; Google Trends; finance-based indexes; survey-based indexes; news-based indexes
Subjects
ISSN
2282-6483
DOI
Deposit date
15 Oct 2019 10:24
Last modified
15 Oct 2019 10:24
URI

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