Economic Uncertainty and Divisive Politics: Evidence from the dos Españas
Hannes Mueller and
No 1240, Working Papers from Barcelona School of Economics
This article exploits two newspaper archives to track economic policy uncertainty in Spain in 1905-1945, a period of extreme political polarization. We find that the outbreak of the civil war in 1936 was anticipated by a striking upward level shift of uncertainty in both newspapers. We study the dynamics behind this shift and provide evidence of a strong empirical link between increasing uncertainty and the rise of divisive political issues at the time: socio-economic conflict, regional separatism, power of the military, and role of the church. This holds even when we exploit variation in content at the newspaper level.
Keywords: economic policy uncertainty; Civil War; political polarization; social conflict; agrarian reform; natural language processing; tf-idf (search for similar items in EconPapers)
JEL-codes: D72 D74 N14 N24 N44 (search for similar items in EconPapers)
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Working Paper: Economic uncertainty and divisive politics: evidence from the dos Españas (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:1240
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