The volatility connectedness of the EU carbon market with commodity and financial markets in time- and frequency-domain: The role of the U.S. economic policy uncertainty

This research note extends the literature on the role of economic policy uncertainty and geopolitical risk on US citizens overseas air travel through the examination of the forecast error variance decomposition of total overseas air travel and by regional destination. Our empirical findings indicate that across regional destinations, US economic policy uncertainty explains more of the forecast error variance of US overseas air travel, followed by geopolitical risk with global economic policy uncertainty explaining a much smaller percentage of the forecast error variance.

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The Belt & Road Initiative and the Public and Private Debts of participating Countries: The Role of China's Economic Policy Uncertainty

Structural Change and Economic Dynamics ◽

10.1016/j.strueco.2021.11.014 ◽

2021 ◽

Author(s):

Yunpeng Sun ◽

Zhou Lu ◽

Qun Bao ◽

Ying Li ◽

Haoning Li

Keyword(s):

Economic Policy ◽

Policy Uncertainty ◽

Public And Private ◽

Economic Policy Uncertainty ◽

The Public

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Geopolitical risk, economic growth, economic uncertainty and international inbound tourism: an Indian Illustration

Review of Economics and Political Science ◽

10.1108/reps-07-2020-0081 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Sudeshna Ghosh

Keyword(s):

Economic Growth ◽

Economic Policy ◽

Trade Openness ◽

Policy Uncertainty ◽

Tourism Demand ◽

Content Type ◽

Economic Policy Uncertainty ◽

Long Run ◽

Geopolitical Risks

Purpose This paper aims to consider the role of geopolitical risk in explaining tourism demand in India, a major tourist destination of the Asian region. Furthermore, the study also considers how in addition to geopolitical risk, economic policy uncertainty, economic growth, exchange rate, inflation and trade openness impact tourism demand. Design/methodology/approach The Bayer and Hanck (2013) method of cointegration is applied to explore the relationship between geopolitical risk and tourism demand. Furthermore, the study has also used the auto distributed lag model to determine whether there is a long-run cointegrating association between tourism demand, geopolitical risk, economic policy uncertainty, economic growth, exchange rate and trade openness. Finally, the vector error correction model confirms the direction of causality across the set of the major variables. Findings This paper finds that geopolitical risk adversely impacts inbound international travel to India. This study also obtains the consistency of the results across different estimation techniques controlling for important macro variables. The Granger causality test confirms the unidirectional causality from geopolitical risk to tourism and further from economic uncertainty to tourism. The findings from the study confirm that geopolitical risks have long-term repercussions on the tourism sector in India. The results indicate that there is an urgent need to develop a pre-crisis management plan to protect the aura of Indian tourism. The tourism business houses should develop skilful marketing strategies in the post-crisis to boost the confidence of the tourists. Research limitations/implications This paper provides valuable practical implications to tourism business houses. The tourism business houses can explore geopolitical risk measure and economic policy uncertainty measure to analyse the demand for international tourism in India. Further, the major stakeholders can establish platforms to help tourists to overcome the fear associated with geopolitical risk. Originality/value This study is the first of its kind to explore the geopolitical risks and their long-run consequences in the context of tourism in India. The study puts emphasis on the role of national policy to maintain peace otherwise it would be detrimental to tourism.

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Economic policy uncertainty and stock prices in BRIC countries: evidence from asymmetric frequency domain causality approach

Applied Economic Analysis ◽

10.1108/aea-12-2020-0172 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Mucahit Aydin ◽

Ugur Korkut Pata ◽

Veysel Inal

Keyword(s):

Economic Policy ◽

Frequency Domain ◽

Stock Prices ◽

Policy Uncertainty ◽

Causality Test ◽

Content Type ◽

Economic Policy Uncertainty ◽

Bric Countries ◽

Causality Tests ◽

Asymmetric Causality

Purpose The aim of this study is to investigate the relationship between economic policy uncertainty (EPU) and stock prices during the period from March 2003 to March 2021. Design/methodology/approach The study uses asymmetric and symmetric frequency domain causality tests and focuses on BRIC countries, namely, Brazil, Russia, India and China. Findings The findings of the symmetric causality test confirm unidirectional permanent causality from EPU to stock prices for Brazil and India and bidirectional causality for China. However, according to the asymmetric causality test, the findings for China show that there is no causality between the variables. The results for Brazil and India indicate that there is unidirectional permanent causality from positive components of EPU to positive components of stock prices. Moreover, for Brazil, there is unidirectional temporary causality from the negative components of EPU to the negative components of stock prices. For India, there is temporary causality in the opposite direction. Originality/value The reactions of financial markets to positive and negative shocks differ. In this context, to the best of the authors’ knowledge, this study is the first attempt to examine the causal relationships between stock prices and uncertainty using an asymmetric frequency domain approach. Thus, the study enables the analysis of the effects of positive and negative shocks in the stock market separately.

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