Search Results (77)

This study examines the asymmetric responses of stock market indices in Türkiye and Kazakhstan to oil price shocks during the 2010–2025 period. Using the Nonlinear Autoregressive Distributed Lag (NARDL) model, the study decomposes the nonlinear effects of oil price fluctuations on financial markets. Empirical findings reveal that in Türkiye, a net oil importer, the stock market exhibits a dual-sensitivity: while exchange rate dynamics (2.34) remain the dominant driver, oil price increases (−0.12) exert a direct and statistically significant negative pressure. In contrast, Kazakhstan, a net oil exporter, shows a high vulnerability to oil price decreases (−1.05) at the 1% significance level, confirming a strong asymmetric structure (p = 0.0122). Furthermore, the error correction speed is significantly higher in Türkiye (28%) than in Kazakhstan (4%), indicating divergent market efficiency and recovery mechanisms. These results demonstrate that financial market reactions to external shocks differ fundamentally based on energy trade structures. The findings suggest that oil-importing countries must prioritize exchange rate stability, while oil-exporting nations must develop specific policy buffers against the persistent downside risks of global energy cycles. Full article

This study investigates whether fluctuations in the real exchange rate give rise to symmetric or asymmetric J-curve effects in manufacturing trade between Türkiye and Germany, thereby positioning the analysis within and contributing to the broader scholarly discourse on exchange rate–trade balance dynamics. Using monthly data for the period 2013M01–2025M07, the paper first estimates a linear Autoregressive Distributed Lag (ARDL) model for the bilateral manufacturing trade balance and subsequently extends the framework to a nonlinear ARDL (NARDL) specification, which explicitly incorporates symmetry and asymmetry by decomposing real exchange rate changes into positive (depreciation) and negative (appreciation) partial sums. The linear ARDL results provide no evidence of a conventional J-curve and suggest that the aggregate impact of the real exchange rate is weak and often statistically insignificant. In contrast, the NARDL estimates uncover pronounced long-run and cumulative short-run asymmetries: real depreciations of the Turkish lira are associated with a persistent improvement in the bilateral manufacturing trade balance, whereas appreciations exert weak and statistically insignificant effects, a finding that remains robust when a real effective exchange rate measure is employed. Overall, the evidence indicates that Türkiye–Germany manufacturing trade does not conform to the standard J-curve pattern. These findings suggest that trade policy should adopt an asymmetric stance toward exchange rate movements: since depreciations yield persistent trade balance improvements while appreciations produce negligible effects, policies designed to support export competitiveness should prioritize the management of depreciation episodes rather than assuming symmetric adjustment dynamics. Full article

This study explores the asymmetric moderating effect of inflation and financial development on carbon (CO₂) emissions using annual data from Fiji over the period from 1970 to 2023. This study is motivated by the dearth of evidence on the ecological implications of macroeconomic variables in climate-vulnerable small island developing states. We find that an increase in inflation more strongly reduces CO₂ emissions compared to by how much an equivalently sized decrease in inflation increases CO₂ emissions. We further find that positive shocks to financial development accentuate the negative effect of inflation on CO₂ emissions. Negative shocks, by contrast, attenuate the negative effect of inflation on CO₂ emissions. This pattern of asymmetries implies the presence of credit-constrained consumers who may be highly sensitive to cost-of-living pressures. The results further imply the role of demand suppression in mitigating CO₂ emissions. The policy implication is that macroeconomic indicators such as inflation tend to have ecological implications, which must be recognized by policymakers in determining stabilization policies. Full article

Given the context of the COVID-19 pandemic disrupting global logistics, coupled with the Russia–Ukraine war causing global energy price changes, examining both the linear and nonlinear associations between shipping cost and oil price is crucial in a global context. This study empirically exhibits the association among Global Commodity Prices Index (GPI), Oil Price (OP), Gold Future Price (GFP), and Baltic Dry Index (BDI) by employing Linear Autoregressive Distributive Lag (ARDL) as well as Nonlinear Autoregressive Distributive Lag (Nonlinear ARDL) from January 2003 to January 2023. The findings indicate that the influence of OP on BDI has a negative impact in the long run and a positive impact in the short run. Furthermore, the OP has an asymmetric effect on BDI in both the long and short terms. Finally, the predictive performance of the NARDL model outperforms the ARDL model in forecasting OP and BDI. The empirical findings derived from the ARDL and NARDL algorithms offer valuable insights for policymakers in designing public policies and for investors in portfolio construction. Full article

This study examines the determinants of U.S. CO₂ emissions and provides evidence to inform more effective carbon-reduction policies. Using Autoregressive Distributed Lag (ARDL) and Nonlinear ARDL (NARDL) models, the analysis covers January 1997 to February 2022 across four end-use sectors: Residential, Commercial, Industrial, and Transportation. The models capture both long-run equilibria and short-run adjustments between emissions and key drivers, including industrial production, interest rates, climate policy uncertainty (CPU), and energy prices. Results indicate a long-run asymmetric relationship in which economic growth and interest rates differentially affect total emissions, while CPU exerts a significant negative influence only in the transportation sector. Methodologically, the combined ARDL–NARDL approach offers robust evidence of nonlinear and asymmetric effects of macroeconomic and policy variables on emissions. These findings underscore the need to integrate economic and financial conditions into climate policy design and suggest that sector-specific measures—particularly targeting transportation—may substantially improve the effectiveness of carbon-mitigation strategies. Full article

This study develops an integrated panel econometric framework for modeling investment–output dynamics in circular economy sectors, explicitly addressing dynamic propagation, long-run equilibrium relationships, endogeneity, and nonlinear responses. Building on the Samuelson–Hicks Multiplier–Accelerator model, the analysis combines two complementary approaches. A dynamic panel specification estimated by the Generalized Method of Moments (Arellano–Bond) is employed to capture output inertia, intertemporal transmission of investment shocks, and stability properties of the dynamic system. In parallel, a nonlinear panel ARDL model estimated using the Pooled Mean Group (PMG/NARDL) methodology is used to identify cointegration and to distinguish between the long-run and short-run effects of positive and negative investment variations. The empirical analysis relies on a balanced panel of 28 European economies (EU-27 and the United Kingdom) over the period 2005–2023, using sectoral circular economy data, with gross value added as the output variable and gross private investment as the main regressor. The results indicate the existence of a stable cointegrated relationship between investment and output, characterized by significant asymmetries, with expansionary investment shocks exerting larger and more persistent effects than contractionary shocks. Dynamic GMM estimates further confirm delayed investment effects and a stable autoregressive structure. Overall, the paper contributes to mathematical economic modeling by providing a unified dynamic–equilibrium panel framework and by extending the empirical relevance of Multiplier–Accelerator dynamics to circular economy systems. Full article

This study examines the determinants of inflation volatility in Tunisia, focusing on central bank independence (CBI), economic transparency, and macroeconomic fundamentals. Although CBI is widely regarded as essential for monetary credibility, its effectiveness depends on its institutional framework. Our contribution is twofold. First, we develop a theoretical framework based on game theory to illustrate how the effectiveness of economic transparency and CBI shapes the welfare of both the central bank and the private sector in the presence (or not) of fiscal policy. Second, we use a binary threshold nonlinear autoregressive distributed lag (NARDL) model to capture long-run relationships and a Markov-switching GARCH (MS-GARCH) framework to model volatility dynamics. As a continuous measure, CBI has no significant impact on volatility. Paradoxically, high de jure independence in a binary regime is associated with a slight increase in inflation fluctuations. This indicates that legal independence alone is insufficient without fiscal discipline or effective coordination between the monetary and fiscal authorities. Notably, under fiscal pressure, greater CBI substantially reduces inflation volatility, highlighting the need for a coherent macroeconomic framework. Economic transparency generally increases short-term volatility but stabilizes inflation when supported by credible fiscal signals. Among the macroeconomic fundamentals, volatility in broad money is strongly destabilizing, whereas fluctuations in industrial production and the real exchange rate are largely insignificant. Government spending and exposure to external shocks, including import prices and geopolitical risks, further amplify this volatility. The observed negative trend over time reflects gradual improvements owing to policy reforms. Policy recommendations emphasize the establishment of genuinely independent and credible monetary institutions, enhancing coordination with fiscal policy, improving communication strategies, and strengthening risk management. Full article

This study examines the determinants of food price inflation in Morocco using a comprehensive econometric framework based on an Autoregressive Distributed Lag (ARDL) model. Relying on monthly data and controlling for major structural shocks, the analysis captures both the short-run dynamics and long-run equilibrium relationships between food prices and key macroeconomic, external, and climatic variables. The estimation results reveal strong inflation inertia, indicating that past food prices are the most significant driver of current price changes. External cost variables, including the nominal effective exchange rate, world oil prices, and international cereal prices, are mostly insignificant in the short run, suggesting a muted and delayed pass-through. Import volumes exert a marginal but lagged effect, while rainfall emerges as a consistent determinant, highlighting Morocco’s structural vulnerability to climatic variability. The error-correction term is negative and significant, confirming the existence of a stable long-run relationship. Long-run estimates show that oil prices and precipitation remain relevant drivers of food price dynamics, whereas the exchange rate appears largely neutral, reflecting the impact of subsidies, managed exchange rate arrangements, and domestic supply-chain characteristics. Nonlinear NARDL estimations provide no evidence of asymmetric exchange rate pass-through. The findings underscore some policy recommendations to enhance agricultural resilience, strengthen climate adaptation, and improve supply-chain efficiency for food price stability. Full article

Concerns about the increasing ecological harm caused by human activities have led to greater recognition of the need to address environmental degradation. Policymakers are implementing actions and strategies to alleviate the detrimental effects of climate-change-driven environmental degradation. One of the policy tools for internalizing the external costs of environmental degradation is eco-taxation, which provides incentives for businesses and individuals to adopt cleaner technologies. Investment in renewable energy has surged in solar and wind due to technological advancements, policy backing, and cost reductions. This study examines the long-term environmental effects of eco-taxation and renewable electricity in France between 1998 and 2020, utilizing a novel Fourier autoregressive distributed lag (NARDL) econometric model. The results indicate that eco-taxation and renewable electricity have nonlinear and asymmetric effects on the environmental sustainability of France. In terms of policy implications, these findings provide policymakers in France with nonlinear and asymmetric insights. The government could optimize eco-taxation design and revenue recycling by integrating its existing green budget approaches with mainstream climate objectives into all government spending and taxation, thereby ensuring policy consistency and preventing environmentally harmful subsidies. Additionally, France could accelerate and diversify renewable deployment by committing to higher renewable generation targets, given the positive nonlinear impact without a rebound effect, or investing in grid flexibility and interconnection through grid modernization, smart grids, and cross-border interconnections. Full article

This study is devoted to investigating the asymmetric effects of geopolitical risks (GPRs) on Vietnam’ exports during the period from January 2010 to December 2024. Using a nonlinear Autoregressive Distributed Lag (NARDL) bounds testing model, the study documented that in the short-run, GPRs have asymmetric effects on Vietnam’s exports. Specifically, negative changes in GPRs have a significantly negative influence on the exports while positive changes in the GPRs have no significant effects on exports. In the long-run, the same effects of GPRs on exports are also found from the NARDL model. Specifically, negative changes in GPRs have a significantly adverse effect on exports, while positive changes in GPRs have no significant influence on exports in the long-run. Moreover, the empirical findings reveal that, in the long-run, the real exchange rate (RER) has a significantly positive impact on exports, suggesting that the depreciation of the VND (Vietnamese Dong) boosts Vietnam’s exports. Finally, the findings obtained from the error correction model show that 34.82 percent of the divergence from the long-run equilibrium caused by a shock in month n will be corrected and adjusted back toward equilibrium in month n + 1. Full article

This paper investigates the symmetric and asymmetric effects of renewable and non-renewable energy on Greece’s economic growth within an extended Cobb–Douglas production function for 1990–2022. The study is motivated by the rising role of renewable energy and the need to determine whether the energy–growth nexus is linear or nonlinear, an issue of central importance for policy. The Brock–Dechert–Scheinkman (BDS) test confirms the nonlinearity of the variables, while Zivot–Andrews unit root tests with structural breaks capture crisis-related disruptions. The Wald test indicates that renewable energy has an asymmetric long-run relationship with growth, whereas non-renewables exert symmetric effects. To model these dynamics, the Nonlinear Autoregressive Distributed Lag (NARDL) framework is applied. Results show that in the long run, positive shocks to renewable energy enhance growth, while both positive and negative shocks to non-renewables have symmetric impacts. In the short run, only non-renewable energy shocks significantly affect growth. Asymmetric causality analysis reveals a bidirectional relationship between positive renewable shocks and growth, suggesting a virtuous cycle of renewable expansion and economic performance. The study contributes by providing the first systematic evidence for Greece on the nonlinear energy–growth nexus, advancing empirical modeling with NARDL and break-adjusted tests, and highlighting the heterogeneous growth effects of renewable versus non-renewable energy. Full article

We study Portugal’s household electricity retail market after legal liberalisation, quantifying market concentration (Herfindahl–Hirschman Index (HHI) and the four-firm concentration ratio (CR4)), consumer switching, and asymmetric wholesale-to-retail price pass-through. Using monthly data for January 2014–December 2019 (primary sample) and robustness checks for 2008–2022, we compute concentration indices from ERSE supplier shares, analyse switching dynamics, and estimate nonlinear autoregressive distributed lag (NARDL) models that decompose wholesale price changes into positive and negative components. The retail market remains highly concentrated during the primary window (HHI ≈ 6300–6800 using shares expressed as percentages on a 10,000 scale); switching rose after deregulation but stabilised at moderate monthly rates; and long-run pass-through is estimated at β⁺ ≈ 0.55–0.61 for wholesale increases and β⁻ ≈ 0.49 for decreases (Wald tests reject symmetry at conventional levels). Results are robust to alternative concentration metrics, exclusion of 2022, and varied lag orders. Policy implications emphasise tariff simplification, active consumer-activation measures, and regular monitoring of concentration and pass-through metrics. Full article

The transition of South Africa from coal-dependent energy systems to renewable energy alternatives presents economic and environmental trade-off complexities that require empirical investigation. This study employed threshold-switching dynamic models, NARDL analysis, and threshold Granger causality tests to investigate nonlinear relationships between renewable energy generation, economic growth, and carbon dioxide emissions in South Africa from 1980 to 2023. The threshold-switching dynamic models revealed critical structural breakpoints: a 56.4% renewable energy threshold for carbon dioxide emissions reduction, a 397.9% trade openness threshold for economic growth optimisation, and a 385.32% trade openness threshold for coal consumption transitions. The NARDL bounds test confirmed asymmetric effects in the carbon dioxide emissions and renewable energy relationship. The threshold Granger causality test established significant unidirectional causality from renewable energy to carbon dioxide emissions, economic growth to carbon dioxide emissions, and bidirectional causality between coal consumption and trade openness. However, renewable energy demonstrated no significant causal relationship with economic growth, contradicting traditional growth-led energy hypotheses. This study concluded that South Africa’s energy transition demonstrates distinct regime-dependent characteristics, with renewable energy deployment requiring critical mass thresholds to generate meaningful environmental benefits. The study recommended that optimal trade integration and renewable energy thresholds could fundamentally transform the economy’s carbon intensity while maintaining sustainable growth patterns. Full article

The BRICS countries have been increasingly prioritizing electricity transition as a crucial step towards achieving sustainable growth, energy security, and mitigating climate change. As major emerging economies, the BRICS nations will play a significant role in the global energy landscape since their transition to renewable energy sources holds a significant implication for global energy markets and environmental sustainability. This study investigates the impact of the renewable energy transition on economic growth in BRICS nations from 1990 to 2023, employing a panel NARDL, DOLS, and FMOLS models. This study investigates the relationship between disaggregated renewable energy sources and economic growth. The findings show that renewable energy’s impact on economic growth varies across countries and depends on the type of renewable energy source. Specifically, hydropower, and wind power are found to have significant positive impacts on economic growth in some BRICS countries, while other renewables and trade openness have insignificant impacts. To foster economic growth and the expansion of renewable energy, it is essential for policymakers to focus on investments in hydropower and wind energy. Furthermore, they should encourage trade liberalization, as well as nuclear power development, and enhance regional collaboration. This study offers significant contributions to the current body of literature on the renewable energy–economic growth nexus, supplying crucial insights for both policymakers and researchers. Full article

The principal objectives of this study were to determine how government spending on human capital, specifically on education and healthcare, impacts Saudi Arabia’s economic growth and its policy implications for sustained economic growth and development. Given the above objectives, this study examined the short-term dynamics and long-term relationships between government spending on human capital, measured by per capita education and healthcare expenditures, and its impact on Saudi Arabia’s economic growth, measured by per capita real GDP, from 1985 to 2021. The Non-linear Auto-regressive Distributed Lag (NARDL) models were used to estimate and examine the relationships. The study concluded that per capita GDP is negatively correlated with per capita government spending on healthcare and positively correlated with per capita spending on education in Saudi Arabia. Per capita GDP is also positively related to exports per capita. The results of the coefficient symmetry test show that per capita spending on healthcare and education causes long-term, asymmetric effects on Saudi Arabia’s per capita GDP, that is, the decline in per capita GDP resulting from a decrease in education spending per capita is larger than the increase in per capita GDP resulting from an increase in education spending per capita. However, the decline in per capita GDP resulting from an increase in healthcare spending per capita is larger than the increase in per capita GDP resulting from a decrease in healthcare spending per capita. The study also found unidirectional causality from per capita spending on healthcare, education, and exports to per capita GDP. Therefore, this study infers that increases in government healthcare spending reduce economic growth, whereas increases in spending on education contribute to it. Saudi Arabia’s economy also experiences export-led economic growth. The results of this study provide the government and policymakers with valuable insights with respect to the efficient allocation of scarce government resources to education and healthcare for sustained economic growth and development. Full article