# Uncertainty and Business Cycles: Exogenous Impulse or Endogenous Response?

“Uncertainty and Business Cycles: Exogenous Impulse or Endogenous Response?” (2021), by Sydney C. Ludvigson et al. Economics research paper. Original abstract below, unchanged. No free PDF was found.

- Authors: Sydney C. Ludvigson, Sai Ma, Serena Ng
- Published: September 28, 2021
- Field: Economics
- DOI: https://doi.org/10.1257/mac.20190171
- Source: https://doi.org/10.1257/mac.20190171

## Abstract

Uncertainty about the future rises in recessions. But is uncertainty a source of business cycles or an endogenous response to them, and does the type of uncertainty matter? We propose a novel SVAR identification strategy to address these questions via inequality constraints on the structural shocks. We find that sharply higher macroeconomic uncertainty in recessions is often an endogenous response to output shocks, while uncertainty about financial markets is a likely source of output fluctuations. (JEL D81, E23, E32, E44, G14)

Canonical page: https://nerdi.pages.dev/paper/W3121192729
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