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Discussion Paper
The Fourth SNB-FRB-BIS High-Level Conference on Global Risk, Uncertainty, and Volatility: Risk and Uncertainty in a Post-Pandemic World; Implications for the Economy, Financial Markets, and Monetary Policy
Over the past five years, the COVID-19 pandemic, supply chain disruptions, concerns about trade policies and their implications for the global trading network, military conflicts, and broader geopolitical tensions have sharply heightened risk and uncertainty. U.S. and global Economic Policy Uncertainty (EPU) reached unprecedented levels in April 2025, mostly driven by uncertainty about trade policies (Figure 1).
Discussion Paper
Downside and Upside Economic Uncertainty
Over the last year, many forecasts have called out a slowdown in the U.S. economy driven mainly by heightened trade and geopolitical tensions. Instead, growth in the United States has remained quite solid. Real U.S. gross domestic product (GDP) grew at a strong annual rate of 3.8 percent in the second quarter of 2025.
Discussion Paper
Quantifying the Impact of Foreign Economic Uncertainty on the U.S. Economy
In this note, we construct a measure of real economic uncertainty (REU)--based on the predictability of near-term economic performance--for the major advanced economies.
Discussion Paper
Global Real Economic Uncertainty and COVID-19
The COVID-19 pandemic led to unprecedented disruptions in supply, demand, and productivity, which have had cataclysmic health, social, and economic implications across the globe. In this note, we explore the large increase in global real economic uncertainty observed during the pandemic as a channel that explains or magnifies the economic implications of COVID-19
Discussion Paper
Global Inflation Uncertainty and its Economic Effects
Policymakers, including Federal Open Market Committee (FOMC) participants, have been stressing the elevated level of uncertainty, especially related to inflation, and the challenge this poses for monetary policy. As seen in Figure 1, with few exceptions, FOMC participants see the level of uncertainty around their forecasts for core PCE inflation as high, compared to the average over the past 20 years.
Discussion Paper
The Global Transmission of Inflation Uncertainty
The COVID-19 pandemic brought unprecedented disruptions to global supply chains, labor markets, and economic activity, leading to significant volatility in inflation rates worldwide. Not only the level of inflation but the uncertainty about the future path of inflation increased considerably since the onset of the pandemic and have remained elevated until very recently, posing challenges for policymakers and businesses alike. Figure 1 shows a measure of inflation uncertainty proposed in a recent paper by Londono, Ma and Wilson (2024) (LMW hereafter). The intuition behind this measure is that ...
Discussion Paper
Costs of Rising Uncertainty
At many times over the past five years, uncertainty regarding economic and financial conditions, geopolitical risks, and policy outcomes has been remarkably elevated. Since 2019, selected measures of these uncertainties for the United States, shown in figure 1, have reached their highest levels in decades, with the latest surge coming from economic and trade policy uncertainty (EPU and TPU, respectively).
Working Paper
Attention Allocation and Belief Distortions
Using microdata from the Michigan Survey of Consumers, we study how within-household reallocations of attention across news affect inflation expectation bias, measured relative to a real-time, machine-learning full-information benchmark. Shifting attention toward unfavorable (favorable) economic news increases (decreases) forecast bias substantially, while dropping attention to an unfavorable topic has little effect. The largest bias increases come not from inflation news itself, but from attention to unfavorable social, political, and geopolitical narratives. Aggregate news sentiment has no ...
Working Paper
Transmission Growth-at-Risk: How Foreign Financial Vulnerabilities Shape U.S. Growth Prospects
We develop a Transmission Growth-at-Risk (TGaR) framework that incorporates foreign financial vulnerabilities as predictors of U.S. downside growth risk. We distinguish financial conditions, which measure current tightness in credit markets, from financial vulnerabilities, which measure structural fragilities that can amplify shocks. Elevated foreign financial vulnerabilities are associated with lower U.S. growth-at-risk, with transmission through both trade linkages and dollar integration channels. Asset valuation pressures and financial sector leverage abroad have the largest estimated ...
Working Paper
Uncertainty and Growth Disasters
This paper documents several stylized facts on the real effects of economic uncertainty. First, higher uncertainty is associated with a more dispersed and negatively skewed distribution of output growth. Second, the response of economic growth to an increase in uncertainty is highly nonlinear and asymmetric. Third, higher asset volatility magnifies the negative impact of uncertainty on growth. We develop and estimate an analytically tractable model in which rapid adoption of new technology may raise economic uncertainty which causes measured productivity to decline. The equilibrium growth ...