Vanguard's Bill McNabb on the cost of uncertainty for the U.S. economy in lower GDP growth and higher unemployment- 2011-2014

04/28/2013

Vanguard economists estimate the cost of uncertainty in deficit reduction policy, uncertainty in monetary policy, uncertainty in foreign policy, uncertainty for business investment, places a drag on the U.S. economy of $261 billion. Stanford University economists Bloom and Baker and University of Chicago economist Davis have done work showing the level of uncertainty in 2011-2012 continuing into 2013 is about 50% higher than the level seen since 1985. Vanguard economsts based their analysis and estimates on this work and identified specific events leading to the overall uncertainty. This has cost the U.S. economy about 1 million jobs, with job growth being 45,000 per month higher without this overall uncertainty hanging over the economy, according to Vanguard estimates.

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