Chart of the weekGlobal Uncertainty Related to Coronavirus at Record High

By Hites Ahir, Nicholas Bloom, and Davide Furceri The coronavirus continues to spread. As more countries impose quarantines and social distancing, the fear of contagion and income losses is increasing uncertainty around the world. A new measure of economic uncertainty related to pandemics and other disease outbreaks finds that uncertainty around the coronavirus is exceptionally high and is much higher than in past outbreaks. To quantify uncertainty related to the coronavirus crisis and compare it with previous pandemics and epidemics, we developed the World Pandemic Uncertainty Index (WPUI)—a sub-index of the World Uncertainty Index—for 143 countries starting in 1996. To construct the index, we tally the number of times “uncertainty” is mentioned near a word related to pandemics or epidemics in the Economist Intelligence Unit (EIU) country reports. To make the WPUI index comparable across countries, we scale the raw counts by the total number of words in each report. Uncertainty around the coronavirus is much higher than in past outbreaks. As our Chart of the Week shows, the level of uncertainty related to the coronavirus is unprecedented. As of March 31, it is three times the size of the uncertainty during the 2002–03 severe acute respiratory syndrome (SARS) epidemic and about 20 times the … Continue reading Chart of the weekGlobal Uncertainty Related to Coronavirus at Record High