Policy uncertainty contributing to the weak economy

Recent research by Stanford and Chicago economists Scott Baker, Nicholas Bloom, and Steven Davis outlines the role of policy uncertainty in "choking recovery."  The uncertainty they measure "reflects deliberate policy decisions, harmful rhetorical attacks on business and 'millionaires,' failure to tackle entitlement reforms and fiscal imbalances, and political brinkmanship."
  In sum:

A major factor behind the weak recovery and gloomy outlook is a climate of policy-induced economic uncertainty. An index we devised (see attached chart) shows U.S. policy uncertainty at historically high levels.

So how much near-term improvement could we gain from a stable, certainty-enhancing policy regime? We estimate that restoring 2006 levels of policy uncertainty would yield an additional 2.5 million jobs over 18 months. Not a full solution to the jobs shortfall, but a big step in the right direction.

(HT: Greg Mankiw)