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The industrial impact of economic uncertainty shocks in Australia


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Burrell, H and Vespignani, JL ORCID: 0000-0003-0265-4377 2019 , The industrial impact of economic uncertainty shocks in Australia.

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This study establishes the first empirical evidence of the impact of economic uncertainty
shocks on industry-level investment, output and employment in Australia. We find the
Construction and Financial and Insurance Services industries are the most impacted by a shock
to economic uncertainty. Statistically significant declines are observed for investment, output
and employment in the Construction industry, and in terms of magnitude, the declines in output
and employment are the largest across all industries studied. Likewise, the Financial and
Insurance Services industry experiences declines across investment, output and employment,
and undergoes the largest decline in investment in comparison to all other industries examined.
Economic uncertainty explains the most substantial portion of the variation in Financial and
Insurance Services investment and output, highlighting the detrimental effect it has on the
Financial and Insurance Services industry. Furthermore, Health Care and Social Assistance
output and Professional, Scientific and Technical Services investment experience considerable
declines, and in contrast, Public Administration and Safety is shown to be the least impacted

Item Type: Report (Discussion Paper)
Authors/Creators:Burrell, H and Vespignani, JL
Keywords: economic uncertainty, economic uncertainty shocks, SVAR, Australian economy, Australian industries
Publisher: University of Tasmania
Copyright Information:

Copyright 2019 University of Tasmania

Additional Information:

JEL Classification numbers: C10, C32, E00, E30

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