THE PSYCHOLOGICAL FACTOR OF THE COMPANIES AND THEIR EFFECT ON THE NAIRU AND ECONOMIC CYCLE IN SLOVAKIA

Abstract

The paper analyses the uncertainties in postmodern or post-industrial or information society. It outlines the methods that are commonly used for measuring the effect of cognitive processes on decision-making and creating anomalies and uncertainties in general. It submits a Central European parallel to the VIX fear and uncertainty index used in America. It puts several demand shocks in the standard Gordon’s Triangle model for estimating inflation according to S. Sekhon. The Kalman filter method compares the values of the NAIRU and economic cycle without and with the effect of the psychological factor among companies. We outline five scenarios that map the relationship between the uncertainty perception among companies and unemployment rate. A detailed analysis quantifies the intensity of the effect of the estimated psychological factor on the supply side on the unemployment rate. It outlines the consequences for the policymakers whose policies support spilling over the positive expectations in economy.