Economic Policy Uncertainty And Risk Indices: March 5, 2018

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.