Election uncertainty, economic policy uncertainty and financial market uncertainty: A prediction market analysis

This study examines the association between various uncertainties and corporate investment and further investigates this association between state-owned enterprises (SOEs) and non-state-owned enterprises (non-SOEs). Moreover, this study analyzes the indirect effects of uncertainty on corporate investment through cash flow. The current research uses an unbalanced panel data of Chinese nonfinancial listed firms for the period 1999–2016. To control endogeneity issues, this study applies a robust two-step system generalized method of moments (GMM) technique to estimate the model. Empirical findings indicate that market-based and firm-specific uncertainties have positive effects, whereas economic policy and CAPM-based uncertainties have negative effects on corporate investment. Furthermore, results indicate that the effects of market-based, CAPM-based, and firm-specific uncertainties (economic policy uncertainty) were less (more) prominent for SOEs. Additional analyses show that cash flow stimulates the effect of firm-specific uncertainty on SOEs’ investment, whereas it weakens the influence of CAPM-based uncertainty (economic policy uncertainty) on investment of non-SOEs (SOEs). Moreover, cash flow attenuates the market uncertainty effect on investment.

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Impact of US Economic Policy Uncertainty on Geopolitical Risk. Evidence from BRIC Economies

Pénzügyi Szemle = Public Finance Quarterly ◽

10.35551/pfq_2020_4_3 ◽

2020 ◽

Vol 65 (4) ◽

pp. 485-496

Author(s):

Imtiaz Arif ◽

Amna Sohail Rawat ◽

Muhammad Shahbaz

Keyword(s):

Economic Policy ◽

Financial Market ◽

Investment Decisions ◽

Policy Uncertainty ◽

Estimation Technique ◽

Economic Policy Uncertainty ◽

Bric Countries ◽

The Us ◽

Asymmetric Relation ◽

The Relationship

This paper estimates the relationship between US economic policy uncertainty and geopolitical risk in the BRIC economies.1 Due to the assumption of a non-linear and asymmetric relation between US economic policy uncertainty and geopolitical risk of BRIC countries, a nonparametric estimation technique, Quantile on Quantile approach has been used for empirical analysis. The empirical results revealed that the relationship between the US economic policy uncertainty and geopolitical risk of BRIC economies is heterogeneous in nature. We noted that economic policy uncertainty in the US is negatively related to geopolitical risk in Chinese and Russian economies. However, for Indian and Brazilian economies US economic policy uncertainty is positively related to geopolitical risk. The outcomes of the study will be helpful for the investors and financial market players for taking investment decisions. It will also benefit the legislators and policymakers in making policies that could make their respective economies insulated from foreign policy risks.

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COVID-19, Oil Price, Bitcoin, and US Economic Policy Uncertainty: Evidence from ARDL Model

International Journal of Economics and Finance ◽

10.5539/ijef.v13n11p88 ◽

2021 ◽

Vol 13 (11) ◽

pp. 88

Author(s):

Hanan Naser

Keyword(s):

Economic Policy ◽

Financial Market ◽

Global Economy ◽

Positive Impact ◽

Oil Price ◽

Market Volatility ◽

Policy Uncertainty ◽

Economic Policy Uncertainty ◽

The Impact

The pandemic of coronavirus (COVID-19) creates fear and uncertainty causing extraordinary disruption to financial markets and global economy. Witnessing the fastest selloff in the American stock market in history with a plunge of more than 28% in S&P 500 has increased the volatility of global financial market to exceed the level observed during the financial crisis of 2008. On the other hand, Bitcoin value has shown considerable stability in the last couple of months peaking at $10,367.53 in the mid of February 2020. In this context, the aim of this paper is to investigate the impact of COVID-19 numbers on Bitcoin price taking into consideration number of controlling variables including WTI-oil price, S&P 500 index, financial market volatility, gold prices, and economic policy uncertainty of the US. To do so, ARDL estimation has been applied using daily data from December 31, 2019 till May 20, 2020. Key findings reveal that the daily reported cases of new infections have a marginal positive impact on Bitcoin price in the long term. However, the indirect impact associated with the fear of COVID-19 pandemic via financial market stress cannot be neglected. Bitcoin can also serve as a hedging tool against the economic policy uncertainty in the long term. In the short run, while the returns of economic policy uncertainty have no impact on Bitcoin price, the growth in the new cases of COVID-19 infection and returns of financial market volatility have more positive significant impact on Bitcoin returns.

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The relationship between oil prices, global economic policy uncertainty and financial market stress

The Journal of Energy Markets ◽

10.21314/jem.2021.002 ◽

2021 ◽

Author(s):

Sayyed Ziaei

Keyword(s):

Economic Policy ◽

Financial Market ◽

Oil Prices ◽

Policy Uncertainty ◽

Economic Policy Uncertainty ◽

The Relationship

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Foreword

Annals of Spiru Haret University Economic Series ◽

10.26458/1721 ◽

2017 ◽

Vol 17 (2) ◽

pp. 11

Author(s):

Elena Gurgu

Keyword(s):

Economic Policy ◽

Financial Market ◽

Developing Economies ◽

Emerging Market ◽

Policy Uncertainty ◽

Potential Growth ◽

Economic Policy Uncertainty ◽

Global Growth ◽

International Financing ◽

Global Activity

In the middle of 2017, global activity is firming broadly as expected. Manufacturing and trade are picking up, confidence is improving and international financing conditions remain benign. Global growth is projected to strengthen to 2.7 percent in 2017 and 2.9 percent in 2018-19, in line with OECD January forecasts. In emerging market and developing economies (EMDEs), growth is predicted to recover to 4.1 percent in 2017 and reach an average of 4.6 percent in 2018-19, as obstacles to growth in commodity exporters diminish, while activity in commodity importers continues to be robust. Risks to the global outlook remain tilted to the downside. These include increased trade protectionism, elevated economic policy uncertainty, the possibility of financial market disruptions, and, over the longer term, weaker potential growth. .....

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COVID-19, Oil Price, Bitcoin, and US Economic Policy Uncertainty: Evidence from ARDL Model

International Journal of Economics and Finance ◽

10.5539/ijef.v13n11p92 ◽

2021 ◽

Vol 13 (11) ◽

pp. 92

Author(s):

Hanan Naser

Keyword(s):

Economic Policy ◽

Financial Market ◽

Global Economy ◽

Positive Impact ◽

Oil Price ◽

Market Volatility ◽

Policy Uncertainty ◽

Economic Policy Uncertainty ◽

The Impact

The pandemic of coronavirus (COVID-19) creates fear and uncertainty causing extraordinary disruption to financial markets and global economy. Witnessing the fastest selloff in the American stock market in history with a plunge of more than 28% in S&P 500 has increased the volatility of global financial market to exceed the level observed during the financial crisis of 2008. On the other hand, Bitcoin value has shown considerable stability in the last couple of months peaking at $10,367.53 in the mid of February 2020. In this context, the aim of this paper is to investigate the impact of COVID-19 numbers on Bitcoin price taking into consideration number of controlling variables including WTI-oil price, S&P 500 index, financial market volatility, gold prices, and economic policy uncertainty of the US. To do so, ARDL estimation has been applied using daily data from December 31, 2019 till May 20, 2020. Key findings reveal that the daily reported cases of new infections have a marginal positive impact on Bitcoin price in the long term. However, the indirect impact associated with the fear of COVID-19 pandemic via financial market stress cannot be neglected. Bitcoin can also serve as a hedging tool against the economic policy uncertainty in the long term. In the short run, while the returns of economic policy uncertainty have no impact on Bitcoin price, the growth in the new cases of COVID-19 infection and returns of financial market volatility have more positive significant impact on Bitcoin returns.

Download Full-text