World Trade Uncertainty Index: IMFBlog

Uncertainty deters investment and slows economic growth, and the International Monetary Fund has introduced an index that attempts to measure trade uncertainty for 143 advanced and developing nations. The index relies on a search for words related to uncertainty and trade in the Economist Intelligence Unit country reports. “Globally, the trade policy uncertainty index is rising sharply, having been stable at low levels for about 20 years,” the IMF team reports for the World Economic Forum. The sharp rise began in recent years, coinciding with anti-trade feelings as reflected by the Brexit vote and tariff hikes imposed by the United States and China. Increased uncertainty foreshadows declines in output, and the team expects uncertainty to reduce global growth by 0.75 percent for 2019. Uncertainty is not limited to China and the United States, but also dogs Canada, Mexico, Japan and major European economies. The report suggests uncertainty is higher in advanced economies than in emerging or low-income economies. – YaleGlobal