Permanent and temporary inflation uncertainty and investment in the United States

Joseph P. Byrne; E.Philip Davis

doi:10.1016/j.econlet.2004.04.015

Permanent and temporary inflation uncertainty and investment in the United States

Joseph P. Byrne^*, E.Philip Davis

^*Corresponding author for this work

Economics

Research output: Contribution to journal › Article › peer-review

45 Citations (Scopus)

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.

Original language	English
Pages (from-to)	271-277
Number of pages	7
Journal	Economics Letters
Volume	85
Issue number	2
Early online date	9 Aug 2004
DOIs	https://doi.org/10.1016/j.econlet.2004.04.015
Publication status	Published - 30 Nov 2004

Keywords

investment
Markov switching
permanent and temporary uncertainty

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10.1016/j.econlet.2004.04.015

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title = "Permanent and temporary inflation uncertainty and investment in the United States",

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AB - 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.

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KW - Markov switching

KW - permanent and temporary uncertainty

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VL - 85

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JO - Economics Letters

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Permanent and temporary inflation uncertainty and investment in the United States

Abstract

Keywords

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