Working Papers, Konjunkturinstitutet - National Institute of Economic Research
Effects of US Policy Uncertainty on Swedish GDP Growth
() and Pär Österholm
Abstract: In this paper, we study the effects of US policy
uncertainty – measured as the policy uncertainty index of Baker et al.
(2013) – on Swedish GDP growth. Another source of spillovers of shocks to
small open economies is thereby examined. We apply both Bayesian VAR models
and spectral analysis to quarterly data from 1988 to 2013. Results show
that increasing US policy uncertainty has significant negative effects on
Swedish GDP growth. The effect seems to primarily stem from effects on
investment growth and export growth. Our findings could prove useful to
those who analyse and forecast the Swedish economy and potentially also
other similar small open economies.
Keywords: Spillovers; Small open economy; Political uncertainty index; Bayesian VAR; Spectral analysis; (follow links to similar papers)
JEL-Codes: C32; F43; (follow links to similar papers)
40 pages, October 17, 2014
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