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Nick Bloom's economic uncertainty index forebodes sluggish growth

Nov 11 2019

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Faculty

In 2016, IRiSS affiliate and Professor of Economics Nick Bloom released the Economic Policy Uncertainty Index, providing a quantitative approximation of economic uncertainty for 24 countries with advanced economies. This year, he augmentented this dataset with information on a much larger sample of countries - totaling 143 -  to produce the World Uncertainty Index, making it the largest resource of its kind to become accessible to academics and policymakers worldwide.

The good news stops there, however. In a recent working paper with co-authors from the IMF, Bloom and colleagues estimate that a global rise in uncertainty in the first quarter of 2019 may "drag global growth by as much as a half a percentage point for the year" - a massive effect. Furthermore, in a focused analysis on trade-related uncertainty fueled by ongoing trade disputes and anxieties surrounding manufacturing, Bloom and co-authors found that the effect on economic growth could be even higher, at .75%.

 

For a more detailed analysis, read further.