In 1937, in the midst of the US recovery from the Great Depression, President Roosevelt implemented spending cuts in pursuit of a balanced budget. Subsequently, the unemployment rate jumped nearly 6 percentage points over the next year and the US economy re-entered a major recession. In the...

Measures of economic uncertainty are countercyclical, but economic theory does not provide definite guidance on the direction of causation between uncertainty and the business cycle. This paper proposes a new multi-country approach to the analysis of the interaction between uncertainty and...