by Nicholas Bloom
February 14, 2013
Policy conflict and fiscal cri sis in the United States and Europe have spurred concerns about policy uncertainty and its economic effects. Many policymakers, business people, and the media suggest that the political crisis in Washing- ton is leading firms and consumers to postpone hiring and spending decisions, stalling the recovery from the 2007-2009 recession. This essay seeks to investigate this assertion by answering three questions. First, is economic policy uncertainty high in the US and Canada? Second, if so, is this damaging the economy? Finally, what are the prospects for future policy stability and economic growth?