@techreport{7f0f6236655e4f629a92ac97091ef34b,
title = "The Effects of Uncertainty on Economic Conditions Across US States: The Role of Climate Risks",
abstract = "We analyse the impact of uncertainty on the Economic Conditions Index (ECI) of the 50 US states in a panel data set-up, over the weekly period of the 3rd week of April 1987 to the 4th week of March 2023. Using impulse response functions (IRFs) from a linear local projections (LP) model, we show that uncertainty, as captured by the stochastic volatility (SV) of the ECIs, negatively impacts ECI in a statistically significant manner. More importantly, using a nonlinear LP model, the IRFs reveal that the adverse effect of uncertainty is significantly much stronger under the high-regime of climate risks when compared to the low-regime of the same. Understandably, our results have important policy implications.",
keywords = "Economic conditions, Uncertainty, Climate risks, US states, Linear and nonlinear local projections models, Economic conditions, Uncertainty, Climate risks, US states, Linear and nonlinear local projections models",
author = "Xin Sheng and Rangan Gupta and Wenting Liao and Oguzhan Cepni",
year = "2024",
month = mar,
language = "English",
series = "Working Paper Series / Department of Economics. University of Pretoria ",
publisher = "University of Pretoria",
number = "2024-10",
address = "South Africa",
type = "WorkingPaper",
institution = "University of Pretoria",
}