An economic policy uncertainty index for Portugal

Hugo Morão

International Economics, 2024, vol. 178, issue C

Abstract: This paper investigates the effects of policy uncertainty on major macroeconomic variables in Portugal, employing a Structural Vector Autoregression (SVAR) approach. I develop an Economic Policy Uncertainty (EPU) index utilizing data from over twenty news sources, which captures key moments such as elections, budget negotiations, and various crises. In response to a rise in policy uncertainty, firms delay projects, leading to a decline in industrial output and a rise in unemployment. Consumers, in turn, reduce their non-essential spending, resulting in a gradual decline in retail sales. On the financial side, rising policy uncertainty drives down equity prices and widens credit spreads, reflecting the concerns of investors and lenders.

Keywords: Economic uncertainty; Policy uncertainty; Uncertainty shocks; Proxy-SVAR; Correlation restrictions; Textual analysis (search for similar items in EconPapers)
JEL-codes: C43 D80 E32 E65 E66 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2110701724000040
Full text for ScienceDirect subscribers only

Related works:
Working Paper: An Economic Policy Uncertainty Index for Portugal (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:inteco:v:178:y:2024:i:c:s2110701724000040

DOI: 10.1016/j.inteco.2024.100481

Access Statistics for this article

International Economics is currently edited by Valerie Mignon and Marcelo Olarreaga

More articles in International Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().