Pindyck and Solimano (1993) and Mauro (1995) ﬁnd evidence that political uncertainty and an index mea- To proxy for political uncertainty, we use the policy uncertainty index of Baker, Bloom, and Davis (2012). Drawing on data from Fitch Solutions, Marsh’s Political Risk Map 2020 explores the changing risk environment, highlighting the implications for firms operating globally. The technology-focused Nasdaq Composite Index plunged by 1.4%. A more rigorous and sophisticated way of gauging to what extent the VIX is abnormally low given the current levels of political uncertainty is to compare the observed VIX with the VIX predicted by US and global indices of policy uncertainty. Political uncertainty reduces the value of the implicit put protection that the government provides to the market. The IMF’s new World Uncertainty Index (WUI) captures uncertainty related to economic and political events in the near-term and long-term, and looks back 60 years. Economic Policy Uncertainty Index: News-Based Index for the United States Index, Monthly, Not Seasonally Adjusted Jan 1985 to Oct 2020 (Nov 2) Economic Policy Uncertainty Index: Categorical Index: Sovereign debt, currency crises The rationale behind this index is that political uncertainty increases in election years. ... injecting a fresh layer of political uncertainty into the election cycle. It also makes stocks more volatile and more correlated, especially when the economy is weak. The results disclose that most of the 180 countries studied have failed to confront corruption. Political Uncertainty and Corporate Investment 47 ﬁnd that measures of political instability and violence are correlated with cross-country differences in investment rates. Using the policy uncertainty index constructed by Baker et al. The dataset includes the World Uncertainty Index (WUI) at the global level, as well as by income, region, and country levels. (2016) as a proxy for political uncertainty, several studies empirically investigate the impacts of politi- cal uncertainty on stock prices (e.g., Pastor and Veronesi, 2013; Brogaard and Det- Data Dataset. The index is constructed by text-mining country reports from the Economist Intelligence Unit. Updated on October 19, 2020. The Brexit Uncertainty Index shows the percentage of firms which reported that Brexit was in the top three current sources of uncertainty for their business, September 2016 to June 2019 average. We find empirical evidence consistent with these predictions. Issues related to global trade will continue, resulting in persistent political and economic uncertainty for businesses. In January 29, Transparency International released the Corruption Perceptions Index for 2018 revealing an alarming association between corruption and the level of democracy. Table 2 shows that Mexico has the lowest number of elections and the U.S.A. has the highest number of elections. There may have also been a small effect on average productivity through … And it also includes the charts for WUI global and WTUI global… The broad S&P 500 Index of large-cap stocks declined 1.1%, with all 11 primary sectors reporting losses. Consistent with this view, show that their economic-political uncertainty index takes a higher value during election years. It also includes the World Trade Uncertainty Index (WTUI) at the global and country level. Nevertheless, policy uncertainty is still relatively high.