Macroeconomic Uncertainty, Growth and Inflation in the Eurozone: A Causal Approach
12 Pages Posted: 12 Oct 2017
Date Written: October 12, 2017
In this paper, we evaluate the causal relationship between macroeconomic uncertainty indices, inflation and growth rate for 17 Eurozone countries on a county level examination. In performing a series of linear and non-linear causality tests we find little evidence of a causal relationship between uncertainty and macroeconomic variables. Thus, macroeconomic analysis based on uncertainty indices should be treated with caution.
Keywords: output growth, inflation, uncertainty, causality
JEL Classification: C32, E23, E27, E31, E37
Suggested Citation: Suggested Citation