scholarly journals Brexit and its Impact on the Pound in the Foreign Exchange Market

2019 ◽  
Vol 16 (1) ◽  
Author(s):  
Keith Pilbeam
Keyword(s):  
Economic Policy ◽  
Foreign Exchange ◽  
Implied Volatility ◽  
Foreign Exchange Market ◽  
Policy Uncertainty ◽  
The European Union ◽  
Exchange Market ◽  
Soft Or ◽  
Economic Policy Uncertainty ◽  
The Impact

Abstract In this paper we outline the impact and likely future impact of Brexit on the pound. We argue that Brexit implies a significant depreciation of the pound and the degree of depreciation required is heavily linked to whether there will be a soft or hard Brexit. We find that the pound has had broadly similar depreciations to date against both the dollar and the euro. Brexit has considerably raised UK economic policy uncertainty and this, in turn, has at times led to an significant increase in future implied volatility of the pound. While there is an overall link between the state of the ongoing Brexit negotiations with the European Union and movements in the pound in the foreign exchange market, the link is not especially strong unless the perception that the negotiations are going badly has exceeded 60%.

scholarly journals Impact of Economic Policy Uncertainty on Exchange Market Pressure

SAGE Open ◽  
2019 ◽  
Vol 9 (3) ◽  
pp. 215824401987627 ◽  
Author(s):  
Ifedolapo Olabisi Olanipekun ◽  
Godwin Olasehinde-Williams ◽  
Hasan Güngör
Keyword(s):  
Economic Policy ◽  
Foreign Exchange Market ◽  
Consumer Price Index ◽  
Policy Uncertainty ◽  
Exchange Market ◽  
Cross Sectional ◽  
Exchange Market Pressure ◽  
Economic Policy Uncertainty ◽  
Long Run ◽  
Market Pressure

Capturing changes in foreign reserves and exchange rates through the exchange market pressure, this article investigates whether economic policy uncertainty plays any role in exchange market pressure movements while controlling for the effects of domestic and external factors. A panel of 20 countries was examined from 2003Q1 to 2017Q4 using panel techniques that are consistent in the presence of heterogeneity and cross-sectional dependence. The study finds that a long-run relationship exists between exchange market pressure and economic policy uncertainty. Our estimation results reveal that a rise in economic policy uncertainty, consumer price index, trade openness, and financial openness increases the severity of the exchange market pressure in the long run. However, gross domestic product (GDP) growth, domestic credit, and foreign direct investment inflows can cushion the effect of the pressure. Therefore, irrespective of whether a country operates fixed, flexible, or intermediate exchange rate regime, its foreign exchange market is still significantly affected by economic policy uncertainty.

scholarly journals Do Economic Policy Uncertainty and Geopolitical Risk Lead to Environmental Degradation? Evidence from Emerging Economies

2021 ◽  
Vol 13 (11) ◽  
pp. 5866
Author(s):  
Muhammad Khalid Anser ◽  
Qasim Raza Syed ◽  
Hooi Hooi Lean ◽  
Andrew Adewale Alola ◽  
Munir Ahmad
Keyword(s):  
Economic Policy ◽  
Renewable Energy ◽  
Environmental Degradation ◽  
Emerging Economies ◽  
Ecological Footprint ◽  
Policy Implications ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
Integration Test ◽  
The Impact

Since the turn of twenty first century, economic policy uncertainty (EPU) and geopolitical risk (GPR) have escalated across the globe. These two factors have both economic and environmental impacts. However, there exists dearth of literature that expounds the impact of EPU and GPR on environmental degradation. This study, therefore, probes the impact of EPU and GPR on ecological footprint (proxy for environmental degradation) in selected emerging economies. Cross-sectional dependence test, slope heterogeneity test, Westerlund co-integration test, fully modified least ordinary least square estimator, dynamic OLS estimator, and augmented mean group estimator are employed to conduct the robust analyses. The findings reveal that EPU and non-renewable energy consumption escalate ecological footprint, whereas GPR and renewable energy plunge ecological footprint. In addition, findings from the causality test reveal both uni-directional and bi-directional causality between a few variables. Based on the findings, we deduce several policy implications to accomplish the sustainable development goals in emerging economies.

Economic Policy Uncertainty in the Euro Area: Cross-Country Spillovers and Macroeconomic Impact

2019 ◽  
Vol 239 (5-6) ◽  
pp. 957-981 ◽  
Author(s):  
Volker Clausen ◽  
Alexander Schlösser ◽  
Christopher Thiem
Keyword(s):  
Economic Policy ◽  
Structural Var ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
Financial Firms ◽  
Macroeconomic Impact ◽  
Variance Decompositions ◽  
Cross Country ◽  
Uncertainty Indices ◽  
The Impact

Abstract This paper analyzes spillovers and the macroeconomic effects of economic policy uncertainty (EPU) in Europe over the last two decades. Drawing on the newspaper-based uncertainty indices by Baker et al. (2016, Measuring Economic Policy Uncertainty. Quarterly Journal of Economics 131 (4): 1593–1636), we first use the Diebold and Yilmaz (2014 On the Network Topology of Variance Decompositions: Measuring the Connectedness of Financial Firms. Journal of Econometrics 182 (1): 119–134) connectedness index methodology to investigate the static and dynamic patterns of EPU spillovers. We find substantial spillovers across the European countries. Over time, Germany in particular has become increasingly connected to the other economies. In a second step, we investigate the economic impact of EPU shocks using a structural VAR. The detrimental influence of uncertainty turns out to be regime-dependent. We identify a pre-crisis, a crisis and a post-crisis regime, and the effect is only significant in the former two. Finally, the impact of EPU shocks is also heterogeneous across the monetary union’s most important members.

Economic policy uncertainty and fine wine prices

2020 ◽  
Vol 32 (3) ◽  
pp. 457-476
Author(s):  
Nithya Shankar ◽  
Bill Francis
Keyword(s):  
Economic Policy ◽  
Information Criterion ◽  
Government Policies ◽  
Time Lags ◽  
Policy Uncertainty ◽  
Content Type ◽  
Economic Policy Uncertainty ◽  
The Uk ◽  
The Impact ◽  
Wine Markets

Purpose The paper aims to investigate the impact of economic policy uncertainty (EPU) (i.e. uncertainty due to government policies) on fine wine prices. Design/methodology/approach The paper uses the Baker et al. (2016) monthly news-based measure of EPU for the leading wine markets: the USA, the UK, France, Germany and China in conjunction with monthly fine wine pricing data from the London International Vintners Exchange (Liv-ex). The wine sub-indices used are the Liv-ex 500 (Bordeaux), Burgundy 150, Champagne 50, Rhone 100, Italy 100, California 50, Port 50 and Rest of the World 50. The Prais–Winsten and Cochrane–Orcutt regressions are used for our analyses to correct for effects of serial correlation. Time lags are chosen based on the appropriate information criterion. Findings Changes in EPU levels negatively impact changes in the Liv-ex 500 index for all our leading wine markets except France, the Champagne 50 index for the UK and the Burgundy 150 and the Rhone 100 indices for Germany, with the effects being significant for at least up to a quarter before EPU is detected. The authors did not find significant results for the EPU of France. Practical implications The paper aims to provide insights into whether EPU creates opportunities or threats for investors and wineries. Originality/value A forward-looking news-based EPU measure is used to gain insights into how the different Liv-ex sub-indices react to increases in uncertainty centered around government policies across a sample of different countries.

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