State of Confusion: Economic Policy Uncertainty and International Trade and Investment

22 Pages Posted: 24 Mar 2020

Date Written: June 2019

Abstract

Uncertainty about economic policy in Australia and the United States has increased episodically since the Global Financial Crisis. Existing research focuses on the effects on economic activity, employment and investment. I extend this work to examine the effect of policy uncertainty on global trade volumes, industrial production and cross‐border trade and investment for Australia and the United States. Australia's relative resilience to policy uncertainty shocks reflects a larger role for the exchange rate in intermediating foreign shocks and the absence of a recession in Australia during the sample period considered.

Suggested Citation

Kirchner, Stephen, State of Confusion: Economic Policy Uncertainty and International Trade and Investment (June 2019). Australian Economic Review, Vol. 52, Issue 2, pp. 178-199, 2019, Available at SSRN: https://ssrn.com/abstract=3557378 or http://dx.doi.org/10.1111/1467-8462.12319

Stephen Kirchner (Contact Author)

Fraser Institute ( email )

1770 Burrard Street
4th Floor
Vancouver, British Columbia V6J 3G7
Canada

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