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Abstract:

Blog
Why global uncertainty is declining
Hites Ahir, Nicholas Bloom and Davide Furceri
May 2021
Paper No' :


Tags: brexit; covid-19; uncertainty; trade; growth

The latest update of the World Uncertainty Index indicates that global uncertainty has fallen back to its long-run average after reaching a historical high in 2020. This column describes how this is driven by a significant decline in two key drivers of global uncertainty over the last few years: US-China trade tensions and Brexit negotiations. A sub-index of the World Uncertainty Index, the World Pandemic Uncertainty Index, reveals that uncertainty related to Covid-19 is also starting to subside, especially in developed countries where vaccines rollout has started to pick up. Given this, and because US-China trade and Brexit tensions impacted developed countries more, the authors observe a more salient decline in uncertainty in developed countries than in developing ones.