Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/105151
Authors: 
Ghosal, Vivek
Ye, Yang
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 5059
Abstract: 
We examine the impact of uncertainty on employment dynamics. Alternative measures of uncertainty are constructed based on the survey of professional forecasters, and regression-based forecasting models for GDP growth, inflation, S&P500 stock price index, and fuel prices. Our results indicate that greater uncertainty has a negative impact on growth of employment, and the effects are primarily felt by the relatively smaller businesses; the impact on large businesses are generally non-existent or weaker. Our results suggest that to truly understand the effects of uncertainty on employment dynamics, we need to focus on the relatively smaller and entrepreneurial businesses. We discuss implications for the framing of economic policy.
Subjects: 
uncertainty
employment
small businesses
entrepreneurship
real-options
financing-constraints
JEL: 
L11
D80
O30
G10
L40
Document Type: 
Working Paper

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