There are no readily available insurance policies that will cover all of the uncertainties we face right now, whether that’s the losses individuals or organizations may incur due to the coronavirus-driven loss of employment; plant and concert closings; on-again, off-again trade wars; Federal Reserve emergency interest rate actions; Middle East flare-ups; or the collapse of petroleum prices. The ramifications of these events are not well understood, and the dimensions of risk are unknowable.

It is valuable, though, to at least think about what exactly economic uncertainty is — because that is what we are dealing with. When facing uncertainty, we react as best as we can by taking offsetting action. We hesitate, reassess the situation, and adjust what we are doing after the fact. It helps to have a good savings account because policy (and any other uncertainty) is costly.