APA
Click to copy
Reyes, J. (2026). The Macroeconomic Effects of AI Uncertainty*. ESCoE Discussion Paper No. 2026-02. Economic Statistics Centre of Excellence.
Chicago/Turabian
Click to copy
Reyes, Juan. The Macroeconomic Effects of AI Uncertainty*. ESCoE Discussion Paper No. 2026-02. Economic Statistics Centre of Excellence, February 2026.
MLA
Click to copy
Reyes, Juan. “The Macroeconomic Effects of AI Uncertainty*.” ESCoE Discussion Paper No. 2026-02, Economic Statistics Centre of Excellence, Feb. 2026.
BibTeX Click to copy
@techreport{juan2026a,
title = {The Macroeconomic Effects of AI Uncertainty*},
year = {2026},
month = feb,
institution = {Economic Statistics Centre of Excellence},
journal = {ESCoE Discussion Paper No. 2026-02},
school = {King's College London},
author = {Reyes, Juan},
month_numeric = {2}
}
* Best Paper, Queen Mary University of London (QMUL) Economics and Finance Workshop 2026
ABSTRACT:
This paper develops a novel text-based measure of uncertainty surrounding artificial intelligence (AI) and studies its macroeconomic effects. AI uncertainty shocks are identified in an SVAR using an external instrument based on positive residual movements in the index after controlling for broader economic news about AI. Focusing on the US economy, the results show that an increase in AI uncertainty generates contractionary effects concentrated in equity prices, wages, and hours worked, while employment and industrial production display muted responses. This transmission pattern differs from conventional uncertainty shocks, which produce broader contractions in employment and real activity. The empirical responses are consistent with an automation threat channel. A more valuable option to automate strengthens the bargaining position of firms and lowers wages before adoption occurs. Industry-level estimates reveal heterogeneous labour market adjustments related to differences in AI exposure.
Presented at the following conferences and seminars:
* Poster Presentation
Suggested Citation:
Reyes, J. (2026). The Macroeconomic Effects of AI Uncertainty. Economic Statistics Centre of Excellence (ESCoE) Discussion Paper 2026-02, Available at SSRN: https://ssrn.com/abstract=6233958 or http://dx.doi.org/10.2139/ssrn.6233958