Inflation spikes lead to increased economic uncertainty in G7 countries.
The study looked at how inflation affects uncertainty about future inflation in G7 countries. They used a special model that considers different situations where inflation and uncertainty can change. By analyzing data from 1970 to 2013, they found that the impact of inflation on uncertainty varies depending on the situation in most G7 countries. The results support the idea that higher inflation leads to more uncertainty about future inflation, but only when inflation is already high.