BTA Admin 
Uncertainty is not as easily measured as traditional indicators like growth or inflation, but economists have built some reliable proxies.
One of the best-known gauges is the Economic Policy Uncertainty Index, which tallies how many news stories in major publications cite uncertainty, the economy, and policy. Others track the difference between published economic data and what economists previously projected.
With measures like these still elevated after years of disruption from the pandemic, the surge in inflation, fraying geopolitics and war, climate disasters and rapidly evolving technologies, we now have a better understanding of how greater uncertainty can threaten financial stability. It can exacerbate risks of financial market turmoil, delay consumption and investment decisions by people and businesses, and prompt lenders to tighten the credit supply.
One important observation is that uncertainty about the economy may not always be in step with uncertainty reflected in financial markets. As we show in a chapter of the Global Financial Stability Report, disconnects between high economic uncertainty and low financial market volatility can persist over time. But if a shock brings market volatility roaring back, it can have much broader implications for the economy.
If measures of economic uncertainty were to climb like they did during the global financial crisis, then what we consider as the lowest decile of potential outcomes for economic growth—otherwise known as downside tail risk—would drop by 1.2 percentage points. This means that if the global economy was projected to grow by 0.5 percent in an adverse scenario, it would now be expected to contract by 0.7 percent.
These economic impacts can vary across countries. These effects also can be amplified when public and private debt levels are elevated relative to the size of a given economy
