World Uncertainty Index
- November 14, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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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).