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This paper investigates the role of policy uncertainty on indices of economic globalization from 1996 to 2016 in the panel dataset of 142 countries. For this purpose, we use the nine measures of the Revisited KOF Economic Globalization Indices and two new measures of uncertainty: The World Uncertainty Index (WUI) and the Trade Policy Uncertainty Index (TPUI). The findings indicate that both the WUI and the TPUI are negatively associated with the overall index of economic globalization. The benchmark results remain consistent under various model specifications, econometric estimation techniques, and countries at different income levels.

Does policy uncertainty affect economic globalization? An empirical investigation