Wouter den Haan

Wait and see: The labour market implications of economic uncertainty Wouter den Haan, Lukas B. Freund, Pontus Rendahl 11 September 2021 It has been argued that Increased uncertainty can worsen unemployment if employers prefer to wait and postpone job creation. However, under the dominant theory of unemployment – the search-and-matching model – the value of waiting plays no role.

Wolfgang Schäuble, the outgoing German finance minister, warned in an FT interview last week that ‘economists all over the world are concerned about the increased risks arising from the accumulation of more and more liquidity and the growth of public and private debt.’ This follows an assessment by the Bank of International Settlements, whose chief economist, Claudio Borio, has tied inflated asset values to loose monetary policy: ‘We do not fully understand the factors at work.

Following the referendum decision for the UK to leave the European Union (EU), policy-makers in both the UK and the EU face will face some difficult choices. These choices are likely to have non-trivial and long-lasting consequences, and macroeconomists can offer guidance on their macroeconomic aspects.