Almost Half A Century Of The Economic Policy Uncertainty Index

Menzie Chinn
By Menzie Chinn of Econbrowser.com
Professor of Public Affairs and Economics at the University of Wisconsin •

Looking at the index, it seems a lot less uncertain lately.

It seems a lot less uncertain since 2021M01.

Figure 1: Economic Policy Uncertainty (news based) Index (blue), and average value with Trump dummy (tan). NBER defined peak-to-trough recession dates shaded gray. Source: policyuncertainty.com, NBER, and author’s calculations.

The Trump administration is characterized by 44 point higher EPU. Adding in a dummy variable for the Covid period (2020M02 onward) would reduce the estimated coefficient on the Trump dummy to 33.5 (statistically significant in both cases).

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