Title: Uncertainty Paradox

Speaker: Zhou Jing, Associate Professor, School of Economics, Fudan University. She earned her Bachelor of Science from Tsinghua University in 2007, Master of Management from Tsinghua University in 2009, and Master and PhD in Economics from Hong Kong University of Science and Technology in 2011 and 2016 respectively. She joined the Department of International Finance, Fudan University in 2016 and has served as a Research Fellow of the Shanghai Institute of International Finance and Economics since 2020. She presides over the Shanghai Pujiang Talent Program, National Natural Science Foundation Youth Project and Fudan Type I Peak Discipline Project in Theoretical Economics. Her research covers macroeconomics, macro-finance and China’s economy, with publications in journals including Management World, Journal of Monetary Economics and Review of Economic Dynamics.

Abstract: During economic downturns, firms increase information acquisition to reduce individual uncertainty. However, this heightened collective pursuit of information paradoxically results in a higher level of ex post uncertainty. We refer to this phenomenon as the "Uncertainty Paradox." To explain this paradox, we propose a model with sentiments under incomplete information. In our model, firms acquire information that enhances their understanding of both their idiosyncratic fundamental shocks and aggregate sentiments. When firms believe that sentiments drive aggregate output, acquiring more information unintentionally magnifies output volatility, thereby raising ex post uncertainty and reinforcing firms' incentive to acquire information. Using a standard macroeconomic framework, we show that as the economy transitions from expansion to recession, ex post uncertainty rises with increased ex ante information acquisition. Our results also offer a theoretical explanation for the endogenous rise in uncertainty and information acquisition during economic downturns.

Date & time: 02 June 2026, 10:00 - 12:00

Venue: B310, Zhixin Building, Central Campus, SDU