Overview

Join us on Wednesday 30th July, for a seminar featuring Dr Khanh (Harry) Hoang, who will present his latest research on policy uncertainty and its macroeconomic impacts, using the unique case of Vietnam.

Seminar Overview:
We construct a new government-sourced measure of Categorical Economic Policy Uncertainty (i.e., GovCEPU) through textual analysis, capturing uncertainties in monetary, fiscal, and trade policies. Using the unique case of Vietnam, a country characterized by its sophisticated relationships with China and the United States together with strong government intervention in economic activities, we find that compared to existing news-based indices, the GovCEPU measures consistently reflect higher levels of policy uncertainty. Impulse response analyses indicate that rising GovCEPU is associated with weaker macroeconomic outcomes. Further tests show that banks face heightened risks during periods of increased monetary and fiscal policy uncertainty, while manufacturing firms experience declining performance and reduced capital expenditures in response to growing trade policy uncertainty. By relying on official government sources, our approach offers a novel alternative to media-based measures of policy uncertainty.