Uncertainty in Macroeconomic and Wage Outlooks: An individual-level analysis

Author Name MORIKAWA Masayuki (Distinguished Senior Fellow (specially appointed), RIETI)
Creation Date/NO. April 2024 24-J-013
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This study documents macroeconomic and wage outlooks and their uncertainty during and after the COVID-19 pandemic using original survey data on individuals for the period 2020-2023. The key feature of this study is that it captures uncertainty at the individual-level in the form of subjective confidence intervals for the point forecasts. The result confirms, first, that individual-level subjective uncertainty increased at the same time that the economic outlook deteriorated significantly in the early stages of the COVID-19 pandemic. Second, macroeconomic uncertainty has gradually declined, while wage uncertainty increased again in 2023 after a temporary decline in 2021. Third, both macroeconomic and micro-level wage uncertainty are related to observable individual characteristics, with males, individuals over age 50, and those with higher education having greater subjective uncertainty.