17 Pages Posted: 17 Jan 2014
Date Written: January 2014
There appears to be a strong upward drift in policy-related economic uncertainty after 1960. We consider two classes of explanations for this rise. The first stresses growth in government spending, taxes, and regulation. A second stresses increased political polarization and its implications for the policy-making process and policy choices. While the evidence is inconclusive, it suggests that both factors play a role in driving the secular increase in policy uncertainty over the last half century.
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Suggested Citation: Suggested Citation
Baker, Scott R. and Bloom, Nicholas and Canes-Wrone, Brandice and Davis, Steven J. and Rodden, Jonathan, Why Has U.S. Policy Uncertainty Risen Since 1960? (January 2014). NBER Working Paper No. w19826. Available at SSRN: https://ssrn.com/abstract=2380475