Policy uncertainty can significantly affect long-term investment and output levels in different countries. By studying industry-level investment costs, researchers found that uncertainty in policies leads to higher capital prices and lower investment and output levels. This uncertainty also makes investments more volatile, especially in lower-income countries. The study shows that policy uncertainty can explain large differences in capital prices, investments, and output levels between countries, with the potential to triple the capital price difference and account for similar disparities in investment and output levels.