Essays on Macroeconomics and Applied Economics
Manzur-E-Maula, N H
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The dissertation focuses on three different kinds of uncertainty shocks and their implications for the macroeconomy as well as several household-level adaptation strategies. In the first chapter, I investigate the impact of Geopolitical Risk (GPR) on the U.S. macroeconomy. The GPR is associated with the risks related to wars, terrorist acts, etc. I extend the work of [Caldara and Iacoviello, 2022] by not only looking at GPR’s impact on the economy, but also on employment in different sectors. I find that the GPR uncertainty has implications for both demand and supply side variables of the economy. The estimation results suggest that an increase in GPR leads to a decline in consumer sentiment, GDP growth forecasts, private investment, stock price, industrial production index and payroll employment. On the other hand, an increased GPR leads to a significant rise in the economic policy uncertainty. Even though the responses of inflation and oil prices are positive at first, they decline sharply in the longer run. Finally, employments in the major sectors respond negatively to GPR shock except in the oil and gas extraction, non-durable goods, and military sectors. In the second chapter, I investigate the impact of Economic Policy Uncertainty (EPU) on OECD economies. I consider a multi-country framework to evaluate the economic impact of EPU across 14 selected OECD countries. The Panel Vector Auto-regressive (Panel-VAR) estimation suggests that a one standard deviation increase in the EPU index leads to a decline in consumer confidence, business confidence, and economic growth. On the other hand, the same level of increase in EPU leads to an increase in inflation. However, the response of investment is volatile and fluctuates around the mean even after eight quarters of the EPU shock. In the third chapter, I analyze the effect of natural disaster shocks on households’ food consumption, and different types of adaptation strategies to mitigate the risks arising from natural disasters in Bangladesh. I utilize the household-level survey datasets titled Bangladesh Climate Change Adaptation Survey (BCCAS), Round I, and Round II, developed by the International Food Policy Research Institute (IFPRI). After a rigorous data analysis, I realize that due to natural disaster shocks, households’ per-capita food purchases rise as the food consumption from their own agricultural production decline due to an adverse effect on agricultural production. The estimation results suggest that a one percentage point disaster-induced increase in per-capita consumption of food from purchases pushes households to adapt by almost one percentage point. However, different households engage in different coping strategies based on household characteristics, the impact of natural disasters on households’ food purchases as well as access to finance.Embargo status: Restricted until 09/2172. To request the author grant access, click on the PDF link to the left.