Inflation Uncertainty, Unemployment Uncertainty and Economic Activity
Posted: 17 Dec 1999
This paper shows that Livingston Survey measures of unemployment uncertainty are positively correlated with inflation, that inflation Granger Causes unemployment uncertainty and that shocks to inflation uncertainty or unemployment uncertainty have similar effects on real GDP growth. This suggests higher unemployment uncertainty is a cost of higher inflation that may deserve equal billing with inflation uncertainty.
JEL Classification: E20, E24, E31
Suggested Citation: Suggested Citation