Newswise — The Bush-era tax cuts, the debt ceiling dispute, the fiscal cliff–moments of political uncertainty hold huge policy implications that could shake the economy to its core. The very threat of unstable policy in each instance had a palpable impact across the economy. But how are the economy and policy uncertainty linked? A research conference, to be held on April 7-8, 2015 in Washington DC, aims to explore how uncertainty manifests in fiscal policy, and exactly how that uncertainty can shape the real economy.
“Many economists–perhaps many policy makers as well–will have some sense that unnecessarily injecting uncertainty into the economic environment is an undesirable thing,” says Steve Davis, the William H. Abbott Professor of International Business and Economics at the University of Chicago Booth School of Business. “But the question is: how much weight do you place on it? How much does it matter? Research on that is still playing out.”
The conference, sponsored by the University of Chicago’s Becker Friedman Institute for Research in Economics and the Urban Institute, invites researchers to gather to discuss the best methods of measuring, modeling and evaluating the impact of uncertainty in public policy.
The two-day event, to be held at the Center for Global Development in Washington, DC, will feature presentations from Kevin Hassett (American Enterprise Institute), Ked Hogan (BlackRock Global Market Strategies Group), Simon Gilchrist (Boston University) and others. The complete list of speakers and topics can be found on the event’s website. Researchers, policy makers, and analysts interested in fiscal policy are also welcome to attend.
The event is co-organized by two leaders in research examining the impact of uncertainty on the real economy. Lars Peter Hansen, the recipient of the 2013 Nobel Prize in Economic Sciences, has been recognized for making fundamental advances in our understanding of how economic agents cope with changing and risky environments. Steve Davis created the Economic Policy Uncertainty Index, a great leap forward in creating a measurable benchmark for moments of high policy uncertainty.
“Too often in policy we appeal to really confident statements and overstate what we know,” says Lars Peter Hansen, Becker Friedman Institute Director. Discussions like those that take place at this conference are a first step toward acknowledging what we don’t know about how unsteady policy and economic outcomes are linked, says Hansen.
The conference is part of a broader research initiative into the effects and costs of policy uncertainty, organized by the Becker Friedman Institute and supported by the MacArthur Foundation. That initiative also includes a video series delving into the ways that policy uncertainty and its costs might affect our lives–the first video in that series features the work of Davis.
“Trying to build a solid scientific basis of understanding in this area will eventually be reflected in the form of better policy and better outcomes for all of us,” says Davis.
Media may attend part of or the entire day’s programming, depending on coverage needs. Please RSVP (http://bfi.formstack.com/forms/uncertainty_dc) or contact [email protected] to make arrangements to attend.
More background on the conference is available here: http://bit.ly/1Ew5Eyn
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