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Measuring Economic Policy Uncertainty in Pakistan

Author

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  • Choudhary, M. Ali
  • Pasha, Farooq
  • Waheed, Mohsin

Abstract

We develop an economic policy uncertainty (EPU) index for Pakistan in accordance with Baker, Bloom and Davis (2016) by extracting newspaper articles from Websites (i.e., Web-scraping) and we divided this into two indices. The main index, is based on four leading English-language Pakistan newspapers for the period of January 2015 to April 2020. To cover more historical ground, we also present a second index which uses two of the four newspapers and for which Web harvesting is plausible for a longer period of August 2010 to April 2020. The two indices are highly correlated thus they move in tandem and between them they capture events such as: the great floods of 2010; high terrorism activity; heightened exchange rate volatility; political turmoil; reshuffling of economic managers; the IMF program of 2019, and most recently the COVID-19 pandemic.

Suggested Citation

  • Choudhary, M. Ali & Pasha, Farooq & Waheed, Mohsin, 2020. "Measuring Economic Policy Uncertainty in Pakistan," MPRA Paper 100013, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:100013
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    References listed on IDEAS

    as
    1. Hassett, Kevin A & Metcalf, Gilbert E, 1999. "Investment with Uncertain Tax Policy: Does Random Tax Policy Discourage Investment?," Economic Journal, Royal Economic Society, vol. 109(457), pages 372-393, July.
    2. Nicholas Bloom & Max Floetotto & Nir Jaimovich & Itay Saporta†Eksten & Stephen J. Terry, 2018. "Really Uncertain Business Cycles," Econometrica, Econometric Society, vol. 86(3), pages 1031-1065, May.
    3. Kevin A. Hassett, 1999. "Tax Policy and Investment," Books, American Enterprise Institute, number 53049, September.
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    Cited by:

    1. Jun Wen & Samia Khalid & Hamid Mahmood & Xiuyun Yang, 2022. "Economic policy uncertainty and growth nexus in Pakistan: a new evidence using NARDL model," Economic Change and Restructuring, Springer, vol. 55(3), pages 1701-1715, August.
    2. Tunio, Mohsin Waheed, 2022. "Economic Policy Uncertainty and Industrial Activity: An Evidence from Pakistan," MPRA Paper 113544, University Library of Munich, Germany.
    3. Fasih Ahmed & Muhammad Nawaz & Aisha Jadoon, 2022. "Topic Modeling of the Pakistani Economy in English Newspapers via Latent Dirichlet Allocation (LDA)," SAGE Open, , vol. 12(1), pages 21582440221, March.
    4. Zhang, Li & Hu, Shiwei, 2023. "Foreign uncertainty and domestic exporter dynamics," International Review of Financial Analysis, Elsevier, vol. 87(C).
    5. Tao, Hung-Lin & Cheng, Hui-Pei, 2023. "Economic policy uncertainty and subjective health: A gender perspective," Social Science & Medicine, Elsevier, vol. 334(C).
    6. Tabash, Mosab I. & Farooq, Umar & Ashfaq, Khurram & Tiwari, Aviral Kumar, 2022. "Economic policy uncertainty and financing structure: A new panel data evidence from selected Asian economies," Research in International Business and Finance, Elsevier, vol. 60(C).

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    More about this item

    Keywords

    Uncertainty Index; Developing Economy; Event Study;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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