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State of Confusion: Economic Policy Uncertainty and International Trade and Investment
Author(s) -
Kirchner Stephen
Publication year - 2019
Publication title -
australian economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.308
H-Index - 29
eISSN - 1467-8462
pISSN - 0004-9018
DOI - 10.1111/1467-8462.12319
Subject(s) - recession , economics , investment (military) , international economics , financial crisis , foreign direct investment , sample (material) , global recession , exchange rate , work (physics) , commercial policy , confusion , monetary economics , macroeconomics , political science , politics , mechanical engineering , psychology , chemistry , chromatography , psychoanalysis , law , engineering
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.