Uncertainty faced by households and firms affects economic activity. The rise in uncertainty since the beginning of the sovereign debt crisis in Greece could be one factor that has contributed to the steep and long-lasting recession. This paper presents a brief empirical analysis quantifying this phenomenon and compares it with developments in Ireland and Portugal. Overall, this analysis shows that the uncertainty impact on growth has been relatively small in Greece between 2008 and 2013, although stronger than in Ireland or Portugal. This quantification appears to be robust to various specification changes of the vector auto regressive models developed for this exercise.
This working paper relates to the 2013 Economic Survey of Greece (www.oecd.org/eco/surveys/greece)
