Measuring Economic Policy Uncertainty in Pakistan

Choudhary, M. Ali and Pasha, Farooq and Waheed, Mohsin (2020): Measuring Economic Policy Uncertainty in Pakistan.

Abstract

We develop an economic policy uncertainty (EPU) index for Pakistan in accordance with Baker, Bloom and Davis (2016) by extracting newspaper articles from Websites (i.e., Web-scraping) and we divided this into two indices. The main index, is based on four leading English-language Pakistan newspapers for the period of January 2015 to April 2020. To cover more historical ground, we also present a second index which uses two of the four newspapers and for which Web harvesting is plausible for a longer period of August 2010 to April 2020. The two indices are highly correlated thus they move in tandem and between them they capture events such as: the great floods of 2010; high terrorism activity; heightened exchange rate volatility; political turmoil; reshuffling of economic managers; the IMF program of 2019, and most recently the COVID-19 pandemic.

• Item Type: MPRA Paper
• Language: English
• Keywords: Uncertainty Index, Developing Economy, Event Study
• Subjects: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D80 - General; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E22 - Investment ; Capital ; Intangible Capital ; Capacity; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E66 - General Outlook and Conditions; G - Financial Economics > G1 - General Financial Markets > G18 - Government Policy and Regulation; L - Industrial Organization > L5 - Regulation and Industrial Policy > L50 - General

References

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