Economic Policy Uncertainty and Household Financial Assets

In: Applied Economics Quarterly, Band 65, Heft 2, S. 101-114

Abstract

Abstract
We examine the relationship between economic policy uncertainty (EPU) and patterns of two major household financial assets. Using data from a set of OECD countries from 1995 to 2016 and applying cointegrating regressions, we find evidence that escalations in EPU shift households' portfolios away from shares and towards currency and deposits. Our results have important implications for macroeconomic policymakers and corporate finance managers.
JEL Classifications: G11, D81
Policy Uncertainty; Household Financial Assets; FMOLS