One subject that is a major issue – and one that many believe is “holding back the economy” – is that of “uncertainty.” This is a substantial concern to businesses, both large and small, as seen in recent business surveys including the NFIB Small Business Optimism Survey as well as the Deloitte “CFO Signals” Survey.
While this “uncertainty” seems to comprised of many factors, those prominent include government spending and budget issues; regulations; government requirements; and foreign and monetary policy. Needless to say, the topics are wide-ranging and (potentially) complex.
While I don’t believe, as many do, that this “uncertainty” is the key issue that is constraining economic growth, I nonetheless believe it is a critical issue, especially to businesses.
An April 29 op-ed in the Wall Street Journal, “Uncertainty Is the Enemy of Recovery,” by Bill McNabb, focuses on the topic.
A couple of notable excerpts include:
Quite simply, if firms can’t see a clear road to economic recovery ahead, they’re not going to hire and they’re not going to spend. It’s what economists call a “deadweight loss”—loss caused by inefficiency.
Three economists, Stanford University’s Nicholas Bloom and Scott Baker and the University of Chicago’s Steven Davis, have done invaluable work measuring the level of policy uncertainty over the past few decades. Their research (available at policyuncertainty.com) shows that, on average, U.S. economic policy uncertainty has been 50% higher in the past two years than it has been since 1985.
Please Note – The above is excerpted from the EconomicGreenfield.com (published by StratX, LLC) post of May 14, 2013, titled “Uncertainty And Its Impact On The Economy”
StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.
StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.