Bachelor-Seminar „Macroeconomic implications of uncertainty and expectations“ Wintersemester 2025/26

Contents:

In this seminar, students will discuss the latest research on the macroeconomic implications of uncertainty and expectations. One major objective is to analyze the current situation in major economies against this backdrop and to discuss policy options.

Prüfungsleistung: 

10-seitige Seminararbeit, Präsentation der Seminararbeit (20 min.), Postererstellung, aktive Mitarbeit und Diskussion

Informationen: 

Sie bearbeiten eigenständig ein Ihnen unbekanntes Thema (siehe Liste am Ende dieses Dokuments) anhand wissenschaftlicher Fachliteratur. Erwartet wird, dass Sie eine eigenständige Literaturrecherche durchführen, um unter anderem gegensätzliche Ansichten zu denen in Ihrer Startliteratur zu erarbeiten. Erwartet wird zudem, dass Sie Ihre Thesen durch die Aufbereitung geeigneter Daten oder auf Basis eines theoretischen Modells analysieren. Sie präsentieren Ihre Ergebnisse im Plenum. Ziel ist es dabei, zu zeigen, dass Sie mit dem Thema vollumfänglich vertraut sind und dieses prägnant, illustrativ und interaktiv in der vorgegebenen Zeit darstellen können.

Ziel des Seminars ist es, Sie auf Ihre Bachelorarbeit vorzubereiten.

Sprache: Deutsch und Englisch

Termine: 

Vorlesung (wöchentlich): Mi, 12-14, Boltzmannstr. 20, Kaminzimmer 

Seminartermine (geblockt): 08.01.26 14-18 Uhr, 09.01.26 8-16 Uhr, 10.01.26, 8-16 Uhr

Frist zur Abgabe der Seminararbeit: 28.02.2026.

Anmeldung: Es können maximal 12 Studierende teilnehmen (bei Überbuchung werden die Lehrenden auf Basis einer Mischung von Fachsemester, Studienerfolg, Motivation und Zufall auswählen).

Anmeldung bis 06.10.2025, per Email an ls-makrooekonomik@wiwiss.fu berlin.de;

Rückmeldung über Platzvergabe bis 10.10.2025. Bitte senden Sie uns einen aktuellen Leistungsnachweis und eine kurze Motivation, warum Sie dieses Seminar belegen möchten (< 100 Wörter).

Themenliste:

1. Rossi, B., & Sekhposyan, T. (2015). Macroeconomic uncertainty indices based on nowcast and forecast error distributions. American Economic Review, 105(5), 650-655.

Abstract

We propose new indices to measure macroeconomic uncertainty. The indices measure how unexpected a realization of a representative macroeconomic variable is relative to the unconditional forecast error distribution. We use forecast error distributions based on the nowcasts and forecasts of the Survey of Professional Forecasters. We further compare the new indices with those proposed in the literature and assess their macroeconomic impact.

2. Candia, B., Coibion, O., & Gorodnichenko, Y. (2024). The Inflation Expectations of US Firms: Evidence from a new survey. Journal of Monetary Economics, 145, 103569.

Abstract

Introducing a new survey of U.S. firms’ inflation expectations, we document key stylized facts involving what U.S. firms know and expect about inflation and monetary policy. The resulting time series of firms’ inflation expectations displays unique dynamics, distinct from those of households and professional forecasters. By any typical definition of “anchored” expectations, the inflation expectations of U.S. managers in a low-inflation environment appear far from anchored, much like those of households. And like households, U.S. managers are largely uninformed about recent aggregate inflation dynamics or monetary policy. These results complement existing evidence on firms’ inflation expectations from other countries and confirm that inattention to inflation and monetary policy is pervasive among U.S. firms as well.

3. Segal, G., Shaliastovich, I., & Yaron, A. (2015). Good and bad uncertainty: Macroeconomic and financial market implications. Journal of Financial Economics, 117(2), 369-397.

Abstract

Does macroeconomic uncertainty increase or decrease aggregate growth and asset prices? To address this question, we decompose aggregate uncertainty into ‘good’ and ‘bad’ volatility components, associated with positive and negative innovations to macroeconomic growth. We document that in line with our theoretical framework, these two uncertainties have opposite impact on aggregate growth and asset prices. Good uncertainty predicts an increase in future economic activity, such as consumption, output, and investment, and is positively related to valuation ratios, while bad uncertainty forecasts a decline in economic growth and depresses asset prices. Further, the market price of risk and equity beta of good uncertainty are positive, while negative for bad uncertainty. Hence, both uncertainty risks contribute positively to risk premia, and help explain the cross-section of expected returns beyond cash flow risk. 2 Professur für Makroökonomik Freie Universität Berlin Prof. Dr. Britta Gehrke

4. Ben-David, I., Fermand, E., Kuhnen, C. M., & Li, G. (2018). Expectations uncertainty and household economic behavior (No. w25336). National Bureau of Economic Research.

Abstract

We show that there exists significant heterogeneity across US households in how uncertain they are in their expectations regarding personal and macroeconomic outcomes, and that uncertainty in expectations predicts households' choices. Individuals with lower income or education, more precarious finances, and living in counties with higher unemployment are more uncertain in their expectations regarding own-income growth, inflation, and national home price changes. People with more uncertain expectations, even accounting for their socioeconomic characteristics, exhibit more precaution in their consumption, credit, and investment behaviors.

5. Coibion, O., Georgarakos, D., Gorodnichenko, Y., Kenny, G., & Weber, M. (2024). The effect of macroeconomic uncertainty on household spending. American Economic Review, 114(3), 645-677.

Abstract

We use randomized treatments that provide different types of information about the first and/or second moments of future economic growth to generate exogenous changes in the perceived macroeconomic uncertainty of treated households. The effects on their spending decisions relative to an untreated control group are measured in follow-up surveys. Our results indicate that, after taking into account first moments, higher macroeconomic uncertainty induces households to significantly and persistently reduce their total monthly spending in subsequent months. Changes in spending are broad based across spending categories and apply to larger durable good purchases as well.

6. Castelnuovo, E. (2023). Uncertainty before and during COVID‐19: A survey. Journal of Economic Surveys, 37(3), 821-864.

Abstract

This survey features three parts. The first one reviews the most recent literature on the relationship between domestic (i.e., country-specific) uncertainty and the business cycle, and offers ten main takeaways. The second part surveys contributions to the fast-growing strand of the literature that focuses on the macroeconomic effects of uncertainty spillovers and global uncertainty. The last part presents contributions on the role played by uncertainty during the COVID 19 pandemic.

7. Weber, M., d’Acunto, F., Gorodnichenko, Y., & Coibion, O. (2022). The subjective inflation expectations of households and firms: Measurement, determinants, and implications. Journal of Economic Perspectives, 36(3), 157-184.

Abstract

Households' and firms' subjective inflation expectations play a central role in macroeconomic and intertemporal microeconomic models. We discuss how subjective inflation expectations are measured, the patterns they display, their determinants, and how they shape households' and firms' economic choices in the data and help us make sense of the observed heterogeneous reactions to business-cycle shocks and policy interventions. We conclude by highlighting the relevant open questions and why tackling them is important for academic research and policymaking.

8. Kumar, S., Gorodnichenko, Y., & Coibion, O. (2023). The effect of macroeconomic uncertainty on firm decisions. Econometrica, 91(4), 1297-1332.

Abstract

Using a new survey of firms in New Zealand, we document how exogenous variation in the macroeconomic uncertainty perceived by firms affects their economic decisions. We use randomized information treatments that provide different types of information about the first and/or second moments of future economic growth to generate exogenous changes in the perceived macroeconomic uncertainty of some firms. The effects on their decisions relative to their initial plans as well as relative to an untreated control group are measured in a follow-up survey six months later. We find that as firms become more uncertain, they reduce their prices, employment, and investment, their sales decline, and they become less likely to invest in new technologies or open new facilities. These ex post effects of uncertainty are similar to how firms say they would respond to higher uncertainty when asked hypothetical questions.

9. Dietrich, A. M., Kuester, K., Müller, G. J., & Schoenle, R. (2022). News and uncertainty about COVID-19: Survey evidence and short-run economic impact. Journal of monetary economics, 129, S35-S51.

Abstract

A tailor-made survey documents consumers’ perceptions of the US economy’s response to a large shock: the advent of the COVID-19 pandemic. The survey ran at a daily frequency between March 2020 and July 2021. Consumer’s perceptions regarding output and inflation react rapidly. Uncertainty is pervasive. A business-cycle model calibrated to the consumers’ views provides an interpretation. The rise in household uncertainty accounts for two-thirds of the fall in output. Different perceptions about monetary policy can explain why consumers and professional forecasters agree on the recessionary impact, but have sharply divergent views about inflation.

10. Bianchi, F., & Melosi, L. (2016). Modeling the evolution of expectations and uncertainty in general equilibrium. International Economic Review, 57(2), 717-756.

Abstract

We develop methods to solve general equilibrium models in which forward looking agents are subject to waves of pessimism, optimism, and uncertainty that turn out to critically affect macroeconomic outcomes. Agents in the model are fully rational and conduct Bayesian learning, and they know that they do not know. Therefore, agents take into account that their beliefs will evolve according to what they will observe. This framework accommodates both gradual and abrupt changes in beliefs and allows for an analytical characterization of uncertainty. We use a prototypical Real Business Cycle model to illustrate the methods.

11. Fetzer, T., Hensel, L., Hermle, J., & Roth, C. (2021). Coronavirus perceptions and economic anxiety. Review of Economics and Statistics, 103(5), 968-978.

Abstract

We provide one of the first systematic assessments of the development and determinants of economic anxiety at the onset of the coronavirus pandemic. Using a global data set on internet searches and two representative surveys from the United States, we document a substantial increase in economic anxiety during and after the arrival of the coronavirus. We also document a large dispersion in beliefs about the pandemic risk factors of the coronavirus and demonstrate that these beliefs causally affect individuals' economic anxieties. Finally, we show that individuals' mental models of infectious disease spread understate nonlinear growth and shape the extent of economic anxiety.

12. Abberger, K., Funk, A. K., Lamla, M., Lein, S., & Siegrist, S. (2024). The Pass-Through of Inflation Expectations into Prices and Wages: Evidence from an RCT Survey. CEPR Discussion Papers, DP19595.

Abstract

This paper analyzes the pass-through of inflation expectations into the prices and wages set by firms. We conduct a survey of firms using a tailored questionnaire, incorporating randomized information treatments to generate exogenous variation in inflation expectations. Our findings show that changes in inflation expectations influence both wages and prices, though the pass through is incomplete. Moreover, we find that short-term inflation expectations have higher pass-through coefficients than long-term expectations, particularly for prices. The pass-through varies with the firms' underlying price-setting behavior. Using a vignette in which firms are presented with hypothetical inflation scenarios, we find similar pass-through coefficients without relying on variation generated by the information treatment.

13. Dräger, L., Gründler, K., & Potrafke, N. (2025). Political shocks and inflation expectations: Evidence from the 2022 Russian invasion of Ukraine. Journal of International Economics, 153, 104029.

Abstract

How do global supply-side shocks influence macroeconomic expectations? We exploit the 2022 Russian invasion of Ukraine as a natural experiment to identify the effect of a global political shock, which translated into a momentous supply side shock, on inflation expectations. Collecting a unique survey among tenured economics professors in Germany, we find sizable effects on inflation expectations and monetary policy recommendations. A comparison with a representative sample of households shows that experts’ expectations adjust faster and to a larger degree to the shock. Text analyses on open-ended questions reveal that the effects are caused by supply-side models underlying experts’ formation of expectations.

14. Baker, S. R., Bloom, N., & Terry, S. J. (2024). Using disasters to estimate the impact of uncertainty. Review of Economic Studies, 91(2), 720-747.

Abstract

Uncertainty rises in recessions and falls in booms. But what is the causal relationship? We construct cross-country panel data on stock market returns to proxy for first- and second-moment shocks and instrument these with natural disasters, terrorist attacks, and political shocks. Our IV regression results reveal a robust negative short-term impact of second moments (uncertainty) on growth. Employing multiple vector autoregression estimation approaches, relying on a range of identifying assumptions, also reveals a negative impact of uncertainty on growth. Finally, we show that these results are reproducible in a conventional micro–macro business cycle model with time-varying uncertainty.

15. Barnett, M., Brock, W., & Hansen, L. P. (2022). Climate change uncertainty spillover in the macroeconomy. NBER Macroeconomics Annual, 36(1), 253-320.

Abstract

The design and conduct of climate change policy necessarily confronts uncertainty along multiple fronts. We explore the consequences of ambiguity over various sources and configurations of models that impact how economic opportunities could be damaged in the future. We appeal to decision theory under risk, model ambiguity and misspecification concerns to provide an economically motivated approach to uncertainty quantification. We show how this approach reduces the many facets of uncertainty into a low dimensional characterization that depends on the uncertainty aversion of a decision-maker or fictitious social planner. In our computations, we take inventory of three alternative channels of uncertainty and provide a novel way to assess them. These include i) carbon dynamics that capture how carbon emissions impact atmospheric carbon in future time periods; ii) temperature dynamics that depict how atmospheric carbon alters temperature in future time periods; iii) damage functions that quantify how temperature changes diminish economic opportunities. We appeal to geoscientific modeling to quantify the first two channels. We show how these uncertainty sources interact for a social planner looking to design a prudent approach to the social pricing of carbon emissions.

16. Bloom, N. (2014). Fluctuations in uncertainty. Journal of Economic Perspectives, 28(2), 153-176.

Abstract

Uncertainty is an amorphous concept. It reflects uncertainty in the minds of consumers, managers, and policymakers about possible futures. It is also a broad concept, including uncertainty over the path of macro phenomena like GDP growth, micro phenomena like the growth rate of firms, and noneconomic events like war and climate change. In this essay, I address four questions about uncertainty. First, what are some facts and patterns about economic uncertainty? Both macro and micro uncertainty appear to rise sharply in recessions and fall in booms. Uncertainty also varies heavily across countries— developing countries appear to have about one-third more macro uncertainty than developed countries. Second, why does uncertainty vary during business cycles? Third, do fluctuations in uncertainty affect behavior? Fourth, has higher uncertainty worsened the Great Recession and slowed the recovery? Much of this discussion is based on research on uncertainty from the last five years, reflecting the recent growth of the literature.

17. Filippou, I., Gozluklu, A. E., T Nguyen, M., & Viswanath-Natraj, G. (2021). The information content of Trump tweets and the currency market.

Abstract

Using textual analysis, we identify the set of Trump tweets that contain information on macroeconomic policy, trade, or exchange rate content. We find that informative Trump tweets reduce speculative trading in foreign exchange markets, with a corresponding decline in trading volume, volatility, bid-ask spreads, and induce a positive bias in returns reflecting Trump’s (optimistic) views on the U.S. economy. Two-thirds of his informative tweets are optimistic. This bias serves as a diversion strategy from negative media coverage. We rationalize these results within a model of Trump tweets revealing economic content as a public signal that reduces disagreement among speculators.

18. Bianchi, F., Kung, H., & Tirskikh, M. (2023). The origins and effects of macroeconomic uncertainty. Quantitative Economics, 14(3), 855-896.

Abstract

We estimate a production‐based general equilibrium model featuring demand‐ and supply‐side uncertainty and an endogenous term premium. Using term structure and macroeconomic data, we find sizable effects of uncertainty on risk premia and business cycle fluctuations. Both demand‐ and supply‐side uncertainty imply large contractions in real activity and an increase in term premia, but supply‐side uncertainty has larger effects on inflation and investment. We introduce a novel analytical decomposition to illustrate how multiple distinct endogenous risk wedges account for these differences. Supply and demand uncertainty are strongly correlated in the beginning of our sample, but decouple after the Great Recession.

19. Bondarenko, Y., Lewis, V., Rottner, M. and Schüler, Y., 2024. Geopolitical risk perceptions. Journal of International Economics, 152, p.104005.

Abstract

Geopolitical risk cannot be measured in a universal way. We develop new geopolitical risk indicators relying on local newspaper coverage to account for different perceptions. Using Russia as a case study, we demonstrate that geopolitical risk shocks identified from local news sources have significant adverse effects on the Russian economy, whereas geopolitical risk shocks identified from English-language news sources do not. We control for restricted press freedom by analyzing state-controlled and independent media separately. Employing a novel Russian sanctions index, we illustrate that geopolitical risk shocks propagate beyond the sanctions channel. Still, sanctions worsen the inflationary impact of geopolitical risk shocks substantially.

20. Bondarenko, Y., Lewis, V., Rottner, M., Schüler, Y. (2025). Geopolitical risk in the euro area. CEPR-VOXeu. https://cepr.org/voxeu/columns/geopolitical-risk-euro-area

Abstract

Geopolitical risk is a key concern for the euro area, yet most available measures reflect a US perspective. This column introduces a new indicator of geopolitical risk tailored specifically to the euro area, based entirely on newspaper coverage from local sources. The authors show that shocks to this index have significant recessionary and inflationary effects, even when controlling for ‘global’ geopolitical risk. For anyone seeking to assess geopolitical risk in Europe, this euro area indicator offers a missing regional lens.

General reading: Blanchard, O., & Illing, G. (2021). Makroökonomie. Pearson Deutschland GmbH. Expectations:: V 14-17 Uncertainty: VIII 25.1