Economic uncertainty and its impact on costs of consumption and private sector investment in the Iranian economy

The issue of uncertainty and its economic impact is one of the topics that economic researchers have considered in recent years. In conditions of uncertainty, the decision of economic units to produce, consume and invest, etc., is different from normal conditions. This study aims to determine the index of economic uncertainty for Iran according to the channels of its impact on the economy. Therefore, first, the index extraction ratio has been used to measure economic uncertainty. Then, the effect of this index on macroeconomic variables, including private sector consumption and fixed capital formation by the ARDL method, has been investigated. The result is that uncertainty shocks have a significant effect on these variables.