The Empirical Econometrics and Quantitative Economics Letters
ISSN 2286 – 7147 © EEQEL all rights reserved
Volume 3, Number 2 (June 2014), pp. 15 - 32.
Analyzing the economic policy uncertainty index and
presidential rhetorical simplicity in the United States
Christopher Olds
Visiting Lecturer, Department of Government & International Affairs,
University of South Florida
E-mail: chris@chrisolds.com
ABSTRACT
Recent efforts by Baker, Bloom, and Davis (2013) make it possible to evaluate
whether changes in economic policy uncertainty have any bearing on the
actions taken by political officials. This current project assesses whether
economic policy uncertainty in the United States compels the U.S. president to
increase the linguistic and substantive simplicity of public remarks. In an
attempt to either decrease rising economic policy uncertainty, or stop the
occurrence of economic policy uncertainty altogether, the president can choose
to discuss issues in a very simple way. Time series analyses of monthly
information spanning between 1993 and 2013 indicate that an increase in the
economic policy uncertainty index results in an increase in presidential
rhetorical simplicity. This provides an initial indication that the rhetorical
strategy of linguistic and substantive simplicity employed by presidents can be
shaped by economic conditions.
Keywords: economic policy uncertainty index, presidential rhetoric, rhetorical
simplicity, political communication, vector autoregression, moving
average representation
JEL Classification: E02, E60, C22