Uncertainty in Economics

Uncertainty in economics refers to situations where future outcomes are unpredictable due to incomplete information or chance events. It impacts decision-making by making it difficult to forecast prices, investment returns, or economic growth accurately. Unlike risk, where probabilities can be estimated, uncertainty involves unknown factors that cannot be easily quantified. Economists analyze uncertainty to better understand how individuals and businesses respond when the future is unclear, influencing everything from consumer behavior to government policies. Recognizing uncertainty helps in creating more resilient economic strategies and anticipating potential surprises in the economy.