00000cam 2200000zi 4500 9.962981 CaOODSP 20260522095506 m o d f cr cn||||||||| 260522t20262026onca ob f000 0 eng d CaOODSP eng rda CaOODSP FB3-5/2026-12E-PDF Antonova, Anastasiia, author. Supply shocks in the fog : the role of endogenous uncertainty / Anastasiia Antonova, Mykhailo Matvieiev, Céline Poilly. [Ottawa] : Bank of Canada = Banque du Canada, 2026. ©2026 1 online resource (41 pages) : colour illustrations. text txt rdacontent computer c rdamedia online resource cr rdacarrier Staff working paper = Document de travail du personnel, 1701-9397 ; 2026-12 Incorrect ISSN (1701-9397) printed in this publication. "Last updated: April 10, 2026." Includes bibliographical references (pages 26-29). "Recessions are often accompanied by heightened uncertainty. We build an imperfect-information New Keynesian model in which procyclical information quality generates endogenous countercyclical uncertainty, and the nonlinear structure allows for a precautionary saving motive. We show theoretically that endogenous uncertainty operates entirely through aggregate demand. For negative supply shocks, the induced rise in uncertainty can depress demand enough to dominate the shock's inflationary force, turning the shock deflationary. Monetary policy can fully eliminate the adverse effect of endogenous uncertainty by stabilizing the output gap. We quantify the endogenous uncertainty channel in the US data and find it to be strong enough to generate deflation in response to negative supply shocks"--Abstract. Uncertainty Econometric models. Business cycles Econometric models. Monetary policy Econometric models. Incertitude Modèles économétriques. Cycles économiques Modèles économétriques. Politique monétaire Modèles économétriques. Bank of Canada, issuing body. Staff working paper (Bank of Canada) 2026-12. (CaOODSP)9.806221 PDF 1.38 MB https://publications.gc.ca/collections/collection_2026/banque-bank-canada/FB3-5-2026-12-eng.pdf