From Diane Swonk
Effects of Trade Policy Uncertainty - work done by @IMF. “The drag is stronger on investment than on consumption…” but hits both.
That little blip before now...the onset of the pandemic. Stunning.
Why does it matter? People choose to build or expand factories, office blocks, etc., when they have reasonable certainty and confidence about what is going to happen. When uncertainty skyrockets, physical investment slows, consumers, worried about the future, cut back on spending, and employers stop hiring. And the economy falls into a recession.
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