Expectations, Economic Uncertainty, and Sentiment

Main Article Content

Douglas de Medeiros Franco
https://orcid.org/0000-0001-5674-5106 orcid


Objective: this article aims to help unravel if and how economic uncertainty interacts with the informational structure of sentiment. Methods: the empirical strategy is based on a non-linear and non-parametric causality test to investigate the interaction between variables as distributions. This article builds primarily on the literature on expectation formation. Results: it was found that uncertainty based on the media (ex-ante) precedes sentiment, at most, until the second moment of its distribution. In addition, sentiment helps predict the informational structure of fundamental uncertainty (ex-post) and higher order moments of ex-ante uncertainty. Conclusion: sentiment can be considered a channel for uncertainty through the tone of expectations and erroneous expectations. Ex-ante uncertainty measures can also help calibrate the rational cost-benefit calculation of attention by acting as a leading indicator of the increasing value of information.


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How to Cite
Franco, D. de M. (2022). Expectations, Economic Uncertainty, and Sentiment. Journal of Contemporary Administration, 26(5), e210029. https://doi.org/10.1590/1982-7849rac2022210029.en
Theoretical-empirical Articles


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