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

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.

scholarly journals Economic policy uncertainty and investment in Spain

SERIEs ◽  
2021 ◽  
Author(s):  
Daniel Dejuan-Bitria ◽  
Corinna Ghirelli
Keyword(s):  
Adverse Effect ◽  
Economic Policy ◽  
Strong Evidence ◽  
Investment Decisions ◽  
Corporate Investment ◽  
Precautionary Savings ◽  
Marginal Effect ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
High Uncertainty

AbstractThe aim of this paper is to investigate the effect of economic policy uncertainty on firms’ investment decisions. We focus on Spain for the period 1998–2014. To measure policy-related uncertainty, we borrow the economic policy uncertainty (EPU) indicator available for this country. We find strong evidence that uncertainty reduces corporate investment. This relationship appears to be nonlinear, being the marginal effect of uncertainty attenuated toward zero during periods of high uncertainty levels. Furthermore, the heterogeneous results suggest that the adverse effect of uncertainty is particularly relevant for highly vulnerable firms. Overall, these results are consistent with the hypotheses that economic policy-related uncertainty reduces corporate investment through increases in precautionary savings or to worsening of credit conditions.

INVESTMENT DECISIONS AND FIRM PERFORMANCE UNDER ECONOMIC POLICY UNCERTAINTY

2021 ◽  
Author(s):  
Abdul Quddus ◽  
Drahomíra Pavelková ◽  
Sarfraz Hussain ◽  
Tien Phat Pham ◽  
Arif Ibne Asad
Keyword(s):  
Economic Policy ◽  
Firm Performance ◽  
Investment Decisions ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty

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

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.

Global Economic Policy Uncertainty and Tourism of Fragile Five Countries: Evidence from Time and Frequency Approaches

2020 ◽  
pp. 004728752092124
Author(s):  
Tsung-Pao Wu ◽  
Hung-Che Wu
Keyword(s):  
Economic Policy ◽  
National Security ◽  
High Frequency ◽  
Annual Data ◽  
Frequency Change ◽  
Policy Uncertainty ◽  
Economic Policy Uncertainty ◽  
The Government ◽  
Changes Over Time ◽  
The Relationship

The purpose of this study is to examine the relationship between global economic policy uncertainty (GEPU) and tourism activities in the Fragile Five (F5) countries, namely, Brazil, India, Indonesia, South Africa, and Turkey. By using wavelet transform context structures and the annual data during the period of 1997–2016. The finding shows that the relationship is generally positive but changes over time, displaying low- to high-frequency cycles. Moreover, the timing and frequency change when GEPU co-moves with tourism. It can be recommended that the government maintain the national security and peace protocols.

scholarly journals The Impact of Policy Uncertainty on Macro-Economy of Developed and Developing Countries

2018 ◽  
Vol 10 (1) ◽  
pp. 33 ◽  
Author(s):  
Seabelo T. Nyawo ◽  
Roscoe Bertrum Van Wyk
Keyword(s):  
Economic Policy ◽  
Industrial Production ◽  
Policy Uncertainty ◽  
Macroeconomic Variables ◽  
Economic Policy Uncertainty ◽  
Us Economy ◽  
The Us ◽  
Structural Vars ◽  
The One ◽  
The Impact

This paper investigates the effects of a US economic policy uncertainty shock on Indian macroeconomic variables with a number of Structural VARs. This study models the economic policy uncertainty index as constructed by Baker et al. (2013). The study also uses a set of macroeconomic variables for India such as inflation, industrial production and nominal interest rate. The objective of the study is to identify the potential impacts of economic policy uncertainty shocks from the US economy to the Indian economy. According to the SVARs, a one standard deviation shock to the US economic policy uncertainty leads to a statistically significant decline in the Indian industrial production of -0.294% and in the Indian inflation of -0.032%. India shows to be resistant to US policy uncertainty. Furthermore, the study finds that the contribution of the US economic policy uncertainty on the Indian macroeconomic variables is shown to be significantly larger than the one exerted by the Indian uncertainty shock. 

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