Latest Research Paper: Fiscal Volatility and Financial Markets

We're thrilled to be back with our second research paper! It deals with the impact of uncertainty about fiscal policy on the real economy and financial markets.

You can read it in greater detail with this link.

Given the uncertainty surrounding the upcoming US presidential election, and that the top candidates have radically different views on how to conduct fiscal policy, we think that this analysis is highly relevant, especially as policymakers still try to stabilize the economy.

The Big Picture

Uncertainty about fiscal policy causes firms to slow down or outright stop their investment projects, which leads to a decrease in the demand for corporate credit. Consumers also start rethinking their durables consumption decisions. This has a noticeable negative effect on overall GDP as well as on the price level. This reflects negatively on financial markets.

Stay tuned for more updates and feel free to reach out if you have any questions or want to discuss the findings. Happy reading!