Whether caused by political, geopolitical or macroeconomic factors, uncertainty shocks are liable to affect the real economy. Decisions made by economic agents depend on their assessment of the future situation of the economy as a whole. Thus a situation that suddenly becomes more uncertain, following on from exceptional events (e.g. political or geopolitical crises), can give rise to an “uncertainty shock”. Such a shock can take the form of a series of financial fluctuations: stock market volatility in particular is a macroeconomic measurement that correlates with uncertainty at the individual level. However, such events are likely to confuse the expectations of economic agents and be passed on to the real economy. In the case of France, an uncertainty shock, defined by selecting the main episodes of financial volatility over a long period (a threshold corresponding to the highest 5% of monthly values was selected), has a significant impact on activity: the Industrial Production Index (IPI) falls during the year following the shock and temporarily reaches a level 1% lower than it would have been in the absence of the shock.

The announcement of the dissolution of the National Assembly led to strong volatility in the French financial markets in June 2024. However, an indicator must be constructed over a long period in order to determine the importance of this increase in volatility compared to the last episodes of recorded “shocks”. The method used in this Focus study is able to quantify the extent of the volatility and hence identify the main uncertainty shocks over the recent period: while the different phases of the Covid pandemic and the invasion of Ukraine did cause a major increase in volatility, this was not the case for the dissolution of the National Assembly. The volatility observed in June 2024 on the CAC 40 certainly increased, but it remained contained: thus at the macroeconomic level it was a large uncertainty shock, but not a major one. The event is unusual nonetheless as it is a shock specific to France, whereas previous uncertainty shocks were caused rather by global or European events...