The objective of this research is to use Google search data to build the Google Trends Uncertainty (GTU) index, a weekly measure of uncertainty surrounding economic policy in the four largest economies in the European Union: Germany, France, Italy, and Spain. By obtaining the relative popularity of Google searches with economic policy uncertainty connotations given a specific timeframe and geographical area, the frequency with which people search for terms related to economic policy effectively serves as a proxy for actual economic policy uncertainty. In its entirety, the various elements of this research allow to accurately and unbiasedly measure economic policy uncertainty on a higher frequency than existing indices, gauge the extent to which Germany, France, Italy, and Spain influence each other with regards to uncertainty surrounding economic policy, produce a one-step out-of-sample forecast, and estimate the magnitude with which uncertainty impacts the rate of unemployment and industrial production.
"The Google Trends Uncertainty (GTU) Index: A Measure of Economic Policy Uncertainty in the EU Using Google Trends,"
Undergraduate Economic Review: Vol. 17:
1, Article 2.
Available at: https://digitalcommons.iwu.edu/uer/vol17/iss1/2