Economic uncertainty acts as a deterrent to business decisions regarding investment and employment. Focusing on the Greek economy, which has experienced successive and prolonged crises, we find that uncertainty exerts a significant negative impact on economic activity, with the magnitude of this effect varying across sectors, firm size and measurement method. Using microdata from Business and Consumer Surveys (BCS), we construct new uncertainty indices for the Greek economy. These indices are positively correlated with existing measures, while also allowing for a more granular analysis of uncertainty at both the sectoral and firm levels.

The macroeconometric analysis shows that uncertainty acts as a constraint on both investment and employment, with effects that are substantial and persistent, lasting beyond one year. Indicatively, we estimate that up to 40% of the decline in employment during the 2010–2013 period, as well as up to one-third of the recorded investment gap relative to the EU during the 2009–2015 period, can be attributed to uncertainty. The microeconometric analysis further reveals significant heterogeneity and asymmetry in these effects, depending on firms’ expectations, sectoral characteristics and firm size. Overall, the findings highlight the importance of measuring and systematically monitoring economic uncertainty. Such measurement enables the timely identification of constraints faced by firms in their investment and employment decisions and provides valuable insights for the design and implementation of policy measures aimed at mitigating the adverse effects of uncertainty and strengthening economic resilience.

Part of the study has been published in English, in the Bank of Greece Economic Bulletin #63.

A selection of findings have been presented at CRETE conference 2026.