Photo: UCNew research from three Canterbury University financial economists has shed light on a puzzling relationship between economic policy uncertainty and stock market volatility, and how the quality of political signals impacts on this relationship. Bialkowski says they explored how the strength of political signals impact the relationship between market volatility and economic policy uncertainty. "We find evidence for existing theory that claims that the relationship might be affected by the quality of political signals. "In our paper we show if the quality of political signal is low it breaks some of the well-established relationships in a financial market. The paper - High policy uncertainty and low implied market volatility – an academic puzzle?

Source: Otago Daily Times April 19, 2021 23:48 UTC