Economic Uncertainty and Divisive Politics: Evidence from the 'dos Españas'

54 Pages Posted: 13 Jan 2021

See all articles by Sandra García-Uribe

Sandra García-Uribe

Banco de España

Hannes Felix Mueller

Autonomous University of Barcelona

Carlos Sanz

Banco de España

Date Written: January 13, 2021

Abstract

This article exploits two newspaper archives to track economic policy uncertainty in Spain in 1905-1945, a period of extreme political polarization. We find that the outbreak of the civil war in 1936 was anticipated by a striking upward level shift of uncertainty in both newspapers. We study the dynamics behind this shift and provide evidence of a strong empirical link between increasing uncertainty and the rise of divisive political issues at the time: socio-economic conflict, regional separatism, power of the military, and role of the church. This holds even when we exploit variation in content at the newspaper level.

Keywords: economic policy uncertainty, civil war, social conflict, agrarian reform, natural language processing, tf-idf

JEL Classification: D72, D74, N14, N24, N44

Suggested Citation

García-Uribe, Sandra and Mueller, Hannes Felix and Sanz, Carlos, Economic Uncertainty and Divisive Politics: Evidence from the 'dos Españas' (January 13, 2021). Banco de Espana Working Paper No. 2102, Available at SSRN: https://ssrn.com/abstract=3765441 or http://dx.doi.org/10.2139/ssrn.3765441

Sandra García-Uribe (Contact Author)

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Hannes Felix Mueller

Autonomous University of Barcelona ( email )

Plaça Cívica
Cerdañola del Valles
Barcelona, Barcelona 08193
Spain

Carlos Sanz

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
63
Abstract Views
410
Rank
627,735
PlumX Metrics