How Policy uncertainty affects the labor market ?

Abstract

Economic policy uncertainty, as measured by Baker et al. (2015) captures uncertainty on fiscal, monetary and regulatory policy. Several authors argue that policy uncertainty has played a major role in the slow recovery of the 2007 recession. The sources of the slow (or "jobless") recovery of the labor market in the US are still debated. This thesis would aim at investigating both empirically and theoretically how policy uncertainty affects the labor market. Empirically, a SVAR model could be considered (see Caggiano et al., 2014). Theoretically, a DSGE model seems to be a good candidate for this analysis.