Uncertainty over economic policy throttles lending – ECB study
Authors point to recent developments in US, but say sources of uncertainty can come from anywhere
Increased uncertainty about economic policy slows down lending, researchers from the European Central Bank have said – and the effect holds regardless of where the uncertainty originates.
In their study, published on October 2, Anastasia Allayioti and colleagues identify multiple episodes of uncertainty, including Brexit, the pandemic, the war in Ukraine and, more recently, US trade policy and the heightened geopolitical risk that has ensued.
The researchers find that a one standard deviation
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