High policy uncertainty, the responsibility of which restswith both major political parties, has been undermining theUS economic recovery

John van Reenen, Nicholas Bloom, Scott Baker and Steven Davis argue that one of the factors behind the sluggish economic recovery in the US is increased policy uncertainty. In their view, the two parties and the polarisation of politics are responsible for the high uncertainty. Regardless of who wins the presidency, the two houses of Congress are likely to remain divided by party, thus increasing political polarisation. This analysis provides a clear warning for the UK regarding the negative economic effects of policy uncertainty and the dangers of political polarisation.