Macroeconomic effects of uncertainty: a Google trends-based analysis for India

Abstract

This study proposes a new high-frequency indicator to measure economic policy uncertainty in the context of India, a large emerging market economy. Based on internet search intensity data, the proposed index tends to peak around domestic and global events associated with uncertainty that may prompt economic agents to alter their decisions to spend, save, invest and hire. Using an external instrument with structural vector autoregression (SVAR-IV) framework, we provide fresh evidence on the causal impact of uncertainty on the Indian macroeconomy. We show that surprise increases in uncertainty lead to a fall in output growth and an increase in inflation. This effect is found to be mainly driven by a fall in private investments vis-à-vis consumption indicating a dominant supply-side impact of uncertainty. Lastly, taking the case of output growth, we show that adding our uncertainty index to standard forecasting models leads to better forecasting accuracy compared to other alternate indicators of macroeconomic uncertainty.

New perspectives on measuring cybersecurity

“…Most of the data on the Cyber Policy Portal is compiled from official and publicly available sources. The Potomac Institute's Cyber Readiness Index 2.0 (PIPS, 2015 [43]) is also based on desk research and expert assessments. It considers 70 indicators across seven elements (national strategy, incident response, ecrime and law enforcement; information sharing; investment in research and development; diplomacy and trade, and defence and crisis response), each of which obtains one of three scores (fully operational, partially operational or insufficient evidence).…”