World Trade Uncertainty Index (WTUI) is constructed by counting the number of times uncertainty (and its variants) is mentioned, in proximity to a word related to trade, in the EIU country report. Specifically, the authors looked at the following words: protectionism, North American Free Trade Agreement (NAFTA), tariff, trade, United Nations Conference on Trade and Development (UNCTAD), and World Trade Organization (WTO).
Examples of texts referring to trade uncertainty include: “uncertainty over the renegotiation of the North American Free Trade Agreement”, and “market uncertainty over future trade policy will weigh on investor sentiment”. As for the main index, they scale the index per thousand of words.
Type of variable: Continuous
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