World Uncertainty Index

Subject :Economy

Context:

The World Uncertainty Index and the Economic Policy Uncertainty (EPU) index indicate periods of high uncertainty.

Concept:

The World Uncertainty Index

It is a quarterly measure of uncertainty—by the International Monetary Fund.
It is a measure that tracks uncertainty across the globe by text mining the country reports of the Economist Intelligence Unit.
- These reports cover the economy, policies, and politics of each country.
- The WUI is computed by counting the percent of word “uncertain” (or its variant) in the Economist Intelligence Unit country reports.
- The WUI is then rescaled by multiplying by 1,000,000. A higher number means higher uncertainty and vice versa.
The index is available for 143 countries-all countries in the world with a population of at least 2 million.
It captures uncertainty related to economic and political events,
IMF also computes –World Trade Uncertainty (WTU) index-that measures uncertainty related to trade for 143 individual countries on a quarterly basis from 1996 onwards, using the Economist Intelligence Unit (EIU) country reports

The Global Economic Policy Uncertainty Index

The monthly Economic Policy Uncertainty (EPU) index run by a group of academics in the US is available both globally and for several countries including India.
It is a GDP-weighted average of national EPU indices for 20 countries: Australia, Brazil, Canada, Chile, China, France, Germany, Greece, India, Ireland, Italy, Japan, Mexico, the Netherlands, Russia, South Korea, Spain, Sweden, the United Kingdom, and the United States.
Each national EPU index reflects the relative frequency of own-country newspaper articles that contain a trio of terms pertaining to the economy (E), policy (P) and uncertainty (U).