Remember those quaint notions of policy uncertainty holding back growth? Well, what to make of recent moves in uncertainty and risk indices, given all the talk of trade wars?
Figure 1: US daily Economic Policy Uncertainty index from Baker, Bloom and Davis (dark blue), and seven day centered moving average (red). Orange shading denotes Trump Administration. Source: policyuncertainty.com, and author’s calculations.
Figure 1: Seven day centered moving average of US daily Economic Policy Uncertainty index from Baker, Bloom and Davis (red, left scale), and VIX (blue, right scale). 3/5 observation for 2PM EST. Orange shading denotes Trump Administration. Source: policyuncertainty.com, and author’s calculations.
