Permanent and Temporary Inflation Uncertainty and Investment in the United States
Posted: 25 Oct 2014
Date Written: November 1, 2004
Abstract
We estimate the impact on US non-residential fixed investment of permanent and temporary inflation uncertainty. We find that while both have a negative effect, temporary uncertainty is more important for investment. This study has implications for monetary policy and applied-econometric practice.
Keywords: Investment; Permanent and temporary uncertainty; Markov switching
JEL Classification: E22
Suggested Citation: Suggested Citation
Byrne, Joseph and Davis, E. Philip, Permanent and Temporary Inflation Uncertainty and Investment in the United States (November 1, 2004). Economics Letters, Vol. 85, No. 2, 2004, Available at SSRN: https://ssrn.com/abstract=2514242
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