… "Uncertainty is a real risk," said economist Michael Strain, of the American Enterprise, a right-of-center think tank. "I'd be reluctant to start a business now, and if I had one, I'd be reluctant to increase payroll by 15 percent until I saw how things shake out." There's more to this than an educated hunch. Three academic economists recently created an index of "policy uncertainty" to see whether greater uncertainty harmed economic growth. They found it did. (The index is based on a review of newspaper articles, reports from the Congressional Budget Office and the forecasts of economists.) Greater U.S. uncertainty "foreshadow[s] declines in investment, output and employment," wrote economists Scott R. Baker, of Northwestern University; Nicholas Bloom, of Stanford University; and Steven J. Davis, of the University of Chicago, in The Quarterly Journal of Economics.

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This article was published online by the Daily Journal (Illinois, USA) on November 15, 2016
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