Reading the business press, one gets the impression that the world of policy is in a very uncertain state around the world. This column presents an up-to-date index of policy uncertainty and suggests that the calming of policy uncertainty may have aided recent economic prospects in the US. Unfortunately, policy uncertainty still appears extremely high in Europe with the Eurozone crisis.

Ideology, institutions, political, and accepted economic wisdom shape economic policy choices. This column explores how political ideologies and academic conclusions shaped US policymakers’ responses to the global financial crisis. It says that forecasting macroeconomic developments necessarily involves forecasting the role of such beliefs.