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This paper investigates the impact of economic policy uncertainty on the Britishinterwar economy. A new index constructed from contemporary newspapersindicates that this was a period of great uncertainty. Time series and narrativeevidence suggests that this uncertainty reduced output, raised unemployment andcontributed to macroeconomic volatility.
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This article investigates the impact of economic policy uncertainty on the British interwar economy. The first type of evidence examined is qualitative. The historical record shows that contemporaries regularly reported the incidence and consequences of major uncertainty shocks. The second type of evidence analysed is quantitative. Based on a new index of economic policy uncertainty constructed fr