Understanding Uncertainty

Uncertainty affects companies’ investment and hiring decisions, as well as people’s choices about buying big-ticket durable goods like cars or houses. There are different types of uncertainty. Risk arises when you know the likelihood of outcomes but no...

An episode of the EconoFact Chats podcast, hosted by EconoFact, titled "Understanding Uncertainty" was published on February 19, 2023 and runs 22 minutes.

February 19, 2023 ·22m · EconoFact Chats

Summary

Uncertainty affects companies’ investment and hiring decisions, as well as people’s choices about buying big-ticket durable goods like cars or houses. There are different types of uncertainty. Risk arises when you know the likelihood of outcomes but not what will occur, as happens with flipping a coin. Ambiguity reflects a situation in which the likelihood or effects of outcomes are much less clear, as with the consequences of COVID or climate change. Both play important, and somewhat distinct roles in decision-making. Nicholas Bloom (Stanford) joins Michael Klein on EconoFact Chats this week, to discuss the role of uncertainty, and its patterns across countries and time. Nick is the William D. Eberle Professor of Economics at Stanford University. He was awarded a Guggenheim Fellowship in 2022. Note: This podcast was first posted on 19th February, 2023.

Episode Description