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Why Has U.S. Policy Uncertainty Risen Since 1960?

Author

Listed:
  • Scott R. Baker
  • Nicholas Bloom
  • Brandice Canes-Wrone
  • Steven J. Davis
  • Jonathan A. Rodden

Abstract

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.

Suggested Citation

  • Scott R. Baker & Nicholas Bloom & Brandice Canes-Wrone & Steven J. Davis & Jonathan A. Rodden, 2014. "Why Has U.S. Policy Uncertainty Risen Since 1960?," NBER Working Papers 19826, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:19826
    Note: EFG PE POL
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    References listed on IDEAS

    as
    1. N. Bloom, 2016. "Fluctuations in uncertainty," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 4.
    2. John Dawson & John Seater, 2013. "Federal regulation and aggregate economic growth," Journal of Economic Growth, Springer, vol. 18(2), pages 137-177, June.
    3. Canes-Wrone, Brandice & Park, Jee-Kwang, 2012. "Electoral Business Cycles in OECD Countries," American Political Science Review, Cambridge University Press, vol. 106(1), pages 103-122, February.
    4. Jacob Jensen & Ethan Kaplan & Suresh Naidu & Laurence Wilse-Samson, 2012. "Political Polarization and the Dynamics of Political Language: Evidence from 130 Years of Partisan Speech," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 45(2 (Fall)), pages 1-81.
    5. Hirano, Shigeo & Snyder, James M. & Ansolabehere, Stephen & Hansen, John Mark, 2010. "Primary Elections and Partisan Polarization in the U.S. Congress," Quarterly Journal of Political Science, now publishers, vol. 5(2), pages 169-191, August.
    6. Jacob Jensen & Ethan Kaplan & Suresh Naidu & Laurence Wilse-Samson, 2012. "Political Polarization and the Dynamics of Political Language: Evidence from 130 Years of Partisan Speech," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 43(2 (Fall)), pages 1-81.
    7. David S. Lee & Enrico Moretti & Matthew J. Butler, 2004. "Do Voters Affect or Elect Policies? Evidence from the U. S. House," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(3), pages 807-859.
    8. Nolan McCarty & Keith T. Poole & Howard Rosenthal, 2009. "Does Gerrymandering Cause Polarization?," American Journal of Political Science, John Wiley & Sons, vol. 53(3), pages 666-680, July.
    9. Stephen Ansolabehere & Jonathan Rodden & James M. Snyder Jr., 2006. "Purple America," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 97-118, Spring.
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    More about this item

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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