July 12, 2017

Here is a shout out to Steven J. Davis from my alma mater — the University of Chicago– for his work creating the Economic Policy Uncertainty Index. While the VIX index measures volatility in the markets, the Economic Policy Uncertainty Index provides clues about how politics might be shaping the economy.

Chart of Global Economic Policy Uncertainty Index from 1998 to 2017

Professor Davis developed the index with Scott Baker from the Kellogg School of Management at Northwestern University and Nicholas Bloom at Stanford University. The three saw a need for this kind of measure after the recent financial crisis. The index is used as the basis for research by economists and finance experts looking for connections between political economic uncertainty and different parts of the economy.

You can listen to an NPR Marketplace story about the index here:

http://<iframe src=”https://www.marketplace.org/2017/07/12/economy/government-policy-uncertainty-and-economy/popout” frameborder=”0″ width=”100%” height=”240px”></iframe>

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