Discussion Paper Details

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Title: Economic Uncertainty and Divisive Politics: Evidence from the "dos Españas"

Author(s): Sandra Garcia-Uribe, Hannes Felix Mueller and Carlos Sanz

Publication Date: November 2020


Programme Area(s): Economic History and Macroeconomics and Growth

Abstract: This article exploits two newspaper archives to track economic policy uncertainty in Spain in 1905-1945, a period of extreme political polarization. We find that the outbreak of the civil war in 1936 was anticipated by a striking upward level shift of uncertainty in both newspapers. We study the dynamics behind this shift and provide evidence of a strong empirical link between increasing uncertainty and the rise of divisive political issues at the time: socio-economic conflict, regional separatism, power of the military, and role of the church. This holds even when we exploit variation in content at the newspaper level.

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Bibliographic Reference

Garcia-Uribe, S, Mueller, H and Sanz, C. 2020. 'Economic Uncertainty and Divisive Politics: Evidence from the "dos Españas"'. London, Centre for Economic Policy Research.