The systemic nature of European uncertainty

Daniel Pastorek, Svatopluk Kapounek and Peter Albrecht ()

Economics Letters, 2025, vol. 256, issue C

Abstract: Our paper explores the structural nature of Economic Policy Uncertainty (EPU) in the EU, showing it is shaped by European integration rather than purely country-specific factors. Using a new European Integration Uncertainty Index, we find strong institutional and financial interdependence among member states. Uncertainty connectedness is persistently high (50–60%), with France, Germany, and the UK as key transmitters. We also identify both persistent and episodic transmitters, reflecting structural vulnerabilities and institutional linkages within the EU. These findings highlight the systemic nature of uncertainty propagation across EU countries.

Keywords: Uncertainty; European integration; Spillovers; Connectedness (search for similar items in EconPapers)
JEL-codes: D81 E32 F42 O52 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:256:y:2025:i:c:s0165176525004471

DOI: 10.1016/j.econlet.2025.112610

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