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The systemic nature of European uncertainty

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  • Pastorek, Daniel
  • Kapounek, Svatopluk
  • Albrecht, Peter

Abstract

Our paper explores the structural nature of Economic Policy Uncertainty (EPU) in the EU, showing it is shaped by European integration rather than purely country-specific factors. Using a new European Integration Uncertainty Index, we find strong institutional and financial interdependence among member states. Uncertainty connectedness is persistently high (50–60%), with France, Germany, and the UK as key transmitters. We also identify both persistent and episodic transmitters, reflecting structural vulnerabilities and institutional linkages within the EU. These findings highlight the systemic nature of uncertainty propagation across EU countries.

Suggested Citation

  • Pastorek, Daniel & Kapounek, Svatopluk & Albrecht, Peter, 2025. "The systemic nature of European uncertainty," Economics Letters, Elsevier, vol. 256(C).
    • Handle: RePEc:eee:ecolet:v:256:y:2025:i:c:s0165176525004471
    DOI: 10.1016/j.econlet.2025.112610
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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