In an era marked by unpredictable economic tides, the intricate interplay between economic uncertainty and critical societal indicators demands close examination. Recent comprehensive research spanning multiple countries around the globe unveils the nuanced and multifaceted relationships between economic uncertainty and variables such as suicide rates, unemployment, economic growth, and trade openness. This evolving landscape challenges conventional wisdom and spotlights the complex feedback loops and cultural dynamics underpinning economic phenomena, inviting a reassessment of standard economic models.
The connection between economic uncertainty and suicide rates emerges as particularly complex and varied across nations. In several countries, including Chile, South Africa, Mexico, Lebanon, and Sudan, the data reveals a unidirectional causality from economic uncertainty to increased suicide rates. This aligns with established theories suggesting that heightened uncertainty exacerbates mental health woes, precipitating higher incidences of suicide. However, in other regions such as Colombia, El Salvador, Zimbabwe, and Nepal, a less frequently explored reverse causality holds; rising suicide rates appear to elevate perceptions of economic uncertainty, suggesting that social distress may serve as a barometer of broader economic and societal fragilities.
More intriguingly, countries like Peru, Kenya, Haiti, Finland, and Kazakhstan demonstrate a bidirectional causal relationship between uncertainty and suicide rates, creating a feedback loop that perpetuates both phenomena. Such a dynamic challenges simplistic cause-and-effect paradigms. The mechanism may hinge upon the social fabric’s resilience and the formation of support networks during times of crisis, which can sometimes counterintuitively reduce suicide rates despite persistent uncertainty. Contemporary literature often neglects this nuance, typically analyzing these variables with economic growth as a mediating factor rather than acknowledging the potential for direct bidirectional causality.
When investigating long-term relationships through cointegration analysis, the findings grow more intricate. Common hypotheses in economic psychology posit that increased uncertainty elevates suicide rates, implying a positive cointegrating relationship. This is confirmed in countries like China, Haiti, and Mexico. However, a larger number of countries exhibit a negative cointegration whereby rising suicide rates correspond to decreasing economic uncertainty. Such patterns might be explicable by cultural or social support infrastructures that mitigate the detrimental effects of uncertainty on mental health or by habitual exposure to chronic uncertainty — especially in politically or economically fragile regions — which tempers the psychological impact that rising uncertainty may have otherwise engendered.
The relationship between economic uncertainty and unemployment rates also paints a compelling picture. Numerous nations, including Switzerland, South Africa, Guinea, and Mexico, display a clear unidirectional causality flowing from economic uncertainty to elevated unemployment, corroborating extant theories that uncertain economic conditions erode labor demand. Conversely, in countries like Colombia, Ireland, and Nepal, unemployment appears to drive economic uncertainty, a reversal that signifies complex interactions where labor market distress intensifies perceptions of future economic volatility. This latter direction is particularly pronounced in Bulgaria, which shows some of the highest statistical significance for unemployment instigating uncertainty.
The interplay between uncertainty and unemployment is further complicated by countries exhibiting bidirectional causality, such as Latvia. Here, rising uncertainty fuels unemployment, which subsequently suppresses economic growth and amplifies uncertainty — a vicious cycle of economic malaise. Such cyclical interdependencies underscore the challenge policymakers face when attempting to stabilize labor markets without inadvertently amplifying panic or pessimism in the economy.
Cointegration analysis uncovers surprising results when assessing unemployment and uncertainty together. Some countries, including Chile, Zimbabwe, and Uganda, follow theoretical expectations with a positive association: greater uncertainty corresponds with higher unemployment rates. However, in many Latin American and African countries, evidence points toward a negative long-run association where heightened uncertainty coincides with lower unemployment rates. This counterintuitive finding might reflect the prominence of informal economies in these regions, where labor market responses to uncertainty are adaptive, often involving increased self-employment or informal hiring activities prompted by volatile conditions.
Economic growth, as a vital indicator of national welfare, also shows complex causal linkages with economic uncertainty. In countries like Peru, Finland, Kazakhstan, and Uganda, elevated uncertainty directly hampers growth by undermining consumer and business confidence, thus restraining investment. Conversely, nations including Chile, Brazil, Ireland, and Zimbabwe demonstrate economic growth influencing uncertainty, whereby consistent positive growth stabilizes expectations and reduces perceived economic risks, thus creating a virtuous cycle of confidence and investment.
More notably, several countries such as Kenya, Mexico, and Libya exhibit bidirectional causality between uncertainty and economic growth. This interplay suggests a dynamic environment where economic volatility obstructs growth trajectories, yet positive growth trajectories serve to alleviate uncertainty. Persistent uncertainty in some cases may stimulate innovation or induce structural reforms that bolster growth, offering an alternative to traditional views of uncertainty as exclusively detrimental. This nuanced perspective aligns with recent theoretical insights emphasizing adaptive economic mechanisms within fluctuating environments.
Cointegration analyses reinforce the complexity, revealing predominantly negative long-term associations between uncertainty and economic growth in nations like Chile, Colombia, and Tunisia, affirming that increased uncertainty tends to coincide with depressed growth. Yet certain countries — including Switzerland, Kenya, Nepal, Mali, and China — present positive cointegrations, implying elevated uncertainty aligns with stronger growth. Such paradoxical findings argue for a deeper exploration of how structural economic contexts, institutional robustness, and policy environments might modulate the impacts of uncertainty, potentially reframing prolonged uncertainty as a catalyst for economic dynamism under specific conditions.
Trade openness, essential for global economic integration, exhibits weaker and more ambiguous associations with economic uncertainty but remains critical to understanding macroeconomic volatility. Countries like China, Mexico, and Spain experience uncertainty permeating through trade flows, intensifying instability due to the interconnectedness of global markets. In contrast, Brazil, Guinea, Nepal, Macedonia, and Kazakhstan reveal trade’s influence in mitigating uncertainty, suggesting that expanding trade and globalization may buffer economies against domestic economic fluctuations by diversifying external linkages and stabilizing revenue streams.
Bidirectional causality appears in countries such as Portugal and Kyrgyz Republic, implying that uncertainty contracts trade volumes, while reduced trade activity may exacerbate uncertainty — a feedback cycle with significant implications for trade policy under volatile conditions. Nonetheless, among all variable pairs studied, the trade openness and uncertainty nexus demonstrates the least robust association, hinting that while these effects may exist, their influence is often overshadowed by other more dominant economic forces or only become pronounced when viewed on aggregated global scales.
The cointegration results provide further granularity, showing negative long-term relationships between uncertainty and trade openness in Switzerland, Ireland, South Africa, Zimbabwe, and other countries. This aligns with classical trade theory positing uncertainty as detrimental to trade by increasing transaction costs and perceived risk, thus dampening cross-border commerce. Yet anomalies persist: Peru, Uganda, and Sudan display a positive cointegration between these variables. This could hint at strategic behavioral adaptations where these economies actively pursue trade expansion as a resilience mechanism amid uncertainty, or where commodity export dependencies create feedback loops that stabilize income despite fluctuating risks.
Collectively, these findings signal that economic uncertainty’s relationship with key macroeconomic and social outcomes defies uniform explanation. Cultural, institutional, and structural heterogeneities, alongside differing stages of development, result in variegated outcomes that challenge sweeping generalizations. The presence of bidirectional causality and contrasting cointegration directions implies that adaptive mechanisms, social resilience, and economic structures critically shape how uncertainty manifests in the real economy and societal wellbeing.
Furthermore, regions with more established social support systems or ingrained exposure to chronic economic instability demonstrate tempered effects of uncertainty on sensitive outcomes like mental health and labor markets. This underscores the importance of contextualizing economic models within sociocultural milieus rather than relying exclusively on universal economic assumptions. The research advocates for policies that not only address economic fundamentals but also incorporate strategies to bolster social cohesion and resilience to better weather the psychological and economic shocks wrought by uncertainty.
Given that uncertainty interacts with variables in cycles rather than linear trajectories, policymakers must adopt dynamic and flexible responses that anticipate feedback loops. Traditional interventions targeting solely unemployment or investment may be insufficient or counterproductive if failing to account for reinforcing mechanisms between uncertainty, social distress, and economic performance. Reframing uncertainty not merely as a risk but as a potential stimulus for innovation and structural transformation in certain contexts could pave the way for more nuanced and effective economic governance.
In summary, this pan-national analysis reveals that economic uncertainty is not simply a barrier to societal welfare but a complex force intertwined with behavioral, cultural, and institutional factors that can produce divergent outcomes across regions and sectors. Future research and economic policy should heed these intricate relationships, advancing integrated frameworks that capture feedback effects and heterogeneity to foster economic stability, resilience, and societal wellbeing in an increasingly uncertain world.
Subject of Research: Economic uncertainty and its causal and cointegrating relationships with suicide rates, unemployment rates, economic growth, and trade openness across multiple high uncertainty countries.
Article Title:
Economic uncertainty: a worldwide concern, a causal and cointegrating analysis among high uncertainty countries.
Article References:
Hansika, S., Navamohan, P., Gamage, D. et al. Economic uncertainty: a worldwide concern, a causal and cointegrating analysis among high uncertainty countries. Humanit Soc Sci Commun 12, 1439 (2025). https://doi.org/10.1057/s41599-025-05762-3
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