Uncertainty in Economic Theory

Uncertainty in economic theory refers to the unpredictable nature of economic factors and outcomes, such as market trends, consumer behavior, and policy changes. Unlike risk, which can be measured and quantified, uncertainty involves unknowns that make it difficult to forecast future events. This uncertainty can affect decision-making for businesses, investors, and governments, as they must navigate situations with incomplete information. Understanding uncertainty helps economists analyze how it impacts markets, economic growth, and overall stability, as stakeholders often need to adapt to changing conditions and unexpected developments.