This study explores the determinants of cross-country economic policy uncertainty (EPU) spillovers. We find that bilateral factors such as trade and common language play a highly significant role in explaining the magnitude of EPU spillovers. Furthermore, the magnitude of EPU spillovers is higher for countries having higher vulnerability in terms of fiscal, trade, or financial liability imbalances. (C) 2017 Elsevier B.V. All rights reserved.
Funding Agencies|Jan Wallanders and the Tom Hedelius Foundation; Ministry of Education of the Republic of Korea; National Research Foundation of Korea [NRF-2016S1A3A2924349]