Economic policy uncertainty and bank stability: Threshold effect of institutional quality and competition

The determinants of innovation output in empirical literature were extensively investigated by considering diverse sets of variables. Still, the impact of economic policy uncertainty on innovation output is yet to unleash. To mitigate the existing research gap, the study investigated the association between EPU and innovation output, considering a panel of 22 countries over 1997–2018. The study employed a dynamic panel quantile regression and system-GMM specification causality test for discovering elasticity and directional association both in the long-run and the short-run. Study findings disclosed negative statistically significant effects running from EPU to innovation output except innovation measured by R&D. Moreover, institutional quality and FDI exposed positive and statistically significant association with innovation output. In terms of directional causality, unidirectional causality running from EPU and FDI to innovation output was established, whereas bidirectional causality was established between institutional quality and innovation output.

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Does Economic Policy Uncertainty Affect Exchange Rate in China and Japan? Evidence from Threshold Cointegration with Asymmetric Adjustment

International Journal of Economics and Financial Issues ◽

10.32479/ijefi.11973 ◽

2022 ◽

Vol 12 (1) ◽

pp. 28-36

Author(s):

Riadh El Abed ◽

Zouheir Mighri ◽

Abderrazek Ben Hamouda

Keyword(s):

Economic Policy ◽

Threshold Effect ◽

Adjustment Process ◽

Policy Uncertainty ◽

Threshold Cointegration ◽

Asymmetric Effect ◽

Asymmetric Adjustment ◽

Economic Policy Uncertainty ◽

Nominal Exchange Rates ◽

China And Japan

In this article, we estimate the links between nominal exchange rates (JPY/USD and CNY/USD) and economic policy uncertainty (EPU) in China and Japan by employing monthly data during the period span from January 1997 to September 2020. The threshold cointegration approach focus in TAR, M-TAR, C-TAR and C-MTAR is used. Results indicate the evidence of asymmetric effect in the adjustment process to equilibrium and the M-TAR is the best model to detect threshold effect for the (CNY/USD-CNYEPU) pair and the C-TAR is the best model to detect threshold effect for the (JPY/USD-JPYEPU) pair.

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The Post-COVID-19 Economic Policy Uncertainty and the Effectiveness of Monetary Policy: Evidence From China

Frontiers in Public Health ◽

10.3389/fpubh.2021.771364 ◽

2021 ◽

Vol 9 ◽

Author(s):

Yuegang Song ◽

Yanling Yang ◽

Jianzhong Yu ◽

Zhichao Zhao

Keyword(s):

Monetary Policy ◽

Economic Policy ◽

Central Bank ◽

Threshold Effect ◽

Policy Instrument ◽

Output Gap ◽

Policy Uncertainty ◽

Time Varying ◽

Vector Autoregressive ◽

Economic Policy Uncertainty

The outbreak of the COVID-19 pandemic has caused an upsurge economic policy uncertainty (EPU). Study on the time-varying effect of EPU is of substantial implication for the central bank in implementation of monetary policy. To empirically investigate the time-varying effect of EPU, the paper considers the shock of the monetary policy implemented by China's central bank on different economic variables including interest rate, output gap, and inflationary gap using the latent threshold time-varying parameter vector autoregressive model (LT-TVP-VAR Model). Data period is chosen to be January 2015 through April 2021. Our findings show that (i) EPU has a significant threshold effect on the shock of quantitative monetary policy instrument and the shock of price-based monetary policy, and that the two types of policy are positively correlated; (ii) the price-based monetary policy instrument has a significant counter-cyclical effect on both output gap and inflationary gap; (iii) relative to the quantitative monetary policy instrument, the price-based monetary policy instrument has a more significant counter-cyclical effect on output gap; and (iv) a higher level of EPU is associated with a more significant monetary policy effect on output gap and inflationary gap.

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Economic policy uncertainty and bank stability: Does bank regulation and supervision matter in major European economies?

Journal of International Financial Markets Institutions and Money ◽

10.1016/j.intfin.2021.101387 ◽

2021 ◽

pp. 101387

Author(s):

Thanh Cong Nguyen

Keyword(s):

Economic Policy ◽

Bank Regulation ◽

Policy Uncertainty ◽

Bank Stability ◽

Economic Policy Uncertainty ◽

Regulation And Supervision ◽

Bank Regulation And Supervision ◽

European Economies

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Do international capital flows, institutional quality matter for innovation output: the mediating role of economic policy uncertainty

Green Finance ◽

10.3934/gf.2021018 ◽

2021 ◽

Vol 3 (3) ◽

pp. 351-382

Author(s):

Md Qamruzzaman ◽

Keyword(s):

Economic Policy ◽

Institutional Quality ◽

Empirical Literature ◽

Policy Uncertainty ◽

Causality Test ◽

Economic Policy Uncertainty ◽

Mediating Role ◽

Short Run ◽

Innovation Output ◽

The Impact

<abstract> <p>The determinants of innovation output in empirical literature have been extensively investigated by considering diverse sets of variables. Still, the impact of economic policy uncertainty on innovation output is yet to unleash. The study investigates the association between EPU and innovation output to mitigate the existing research gap, considering a panel of 22 countries over 1997–2018. The study employs a dynamic panel quantile regression and system-GMM specification causality test to discover elasticity and directional association both in the long and short run. Study findings disclosed negative statistically significant effects running from EPU to innovation output except innovation measured by R & D.; moreover, institutional quality and FDI expose positive and statistically significant association with innovation output. In directional causality, unidirectional causality runs from EPU and FDI to innovation output, whereas bidirectional causality establishes between institutional quality and innovation output.</p> </abstract>

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