Interview , News of 10 August 2016

"Machinery investment is likely to experience the strongest declines as a result of the uncertainty": seven questions to Malte Rieth

Gk (Copyright)  Globus Erde Erdkugel
Copyright: Gk

Dr. Rieth, you’ve investigated the possible consequences of the recent spike in uncertainty related to the Brexit vote. How exactly did you measure the change in economic uncertainty here?

We isolated one specific aspect that was undoubtedly related to the “Leave” vote: the change in economic uncertainty that took place overnight between June 23 and June 24, 2016. We tried to accurately quantify this isolated aspect through a counterfactual analysis, keeping constant all other factors affecting the economies of Germany and the euro area. We did not take into account other major events that resulted from the decision, such as the resignation of the prime minister or the reactions from European partners. Additionally, our analysis should not be considered a forecast. [...]

The interview with Malte Rieth is published in DIW Economic Bulletin 32+33/2016 | PDF, 113.26 KB

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