Search Results (3)

The paper explored the fractal, nonlinear and chaotic dynamics between oil prices, inflation, economic growth and unemployment in Turkiye from 1960 to 2024 and examined how energy market volatility propagated through the macroeconomy via complex, regime-dependent mechanisms. It developed a chaotic regression method and employed entropy-based measures (Shannon, Rényi and Tsallis), Lyapunov exponents, Lorenz and Rössler attractors, Julia set diagnostics and the chaos Granger causality test (Hiemstra–Jones). By nesting entropy, chaos and causality within a unified framework, it contributed methodological innovations and practical insights to the energy–economy literature. The chaotic regression results revealed that oil price shocks generated asymmetric and nonlinear responses in inflation, unemployment and growth that were characterized by chaos and sensitivity to initial conditions and demonstrated that oil shocks act as catalysts for nonlinear propagation and fractal macroeconomic dynamics. Julia set results determined that unemployment can be explained by inflation fractal size. Hiemstra–Jones method determined unidirectional causality from oil to both inflation, economic growth and unemployment. According to the results, adopting nonlinear and chaos-based modeling approaches is essential to understand the macroeconomic consequences of energy shocks. For policymakers, the evidence determined that the costs of disinflation or inflation control are sensitive to energy market volatility. The paper contributed to the energy–economy-econometrics literature by integrating entropy, chaos and causality analyses into the oil price–macroeconomy nexus by offering both methodological innovations and practical insights. Full article

The increasing wave of protectionism in various corners of the world with the use of seemingly attractive but economically misleading slogans (shortening supply chains, onshoring, reshoring, nearshoring, friend-shoring, reindustrialization, and ending/correcting ‘hyperglobalization’, etc.) creates a serious challenge to the global trading system and global economic development. Trade and financial transactions have also become victims of the increasing number of geopolitical conflicts and tensions, both ‘hot’ and ‘cold’. Before it becomes too late, i.e., before the current trade tensions go too far and create the hardly reversible spiral of trade and financial wars, retaliations, etc., it is desirable to reflect on what can be lost due to protectionism. This essay analyzes four areas that have benefited from global economic integration since the 1980s (economic growth, poverty eradication, reduction in global economic inequalities, and disinflation) and may suffer from its reversal. It also discusses potential remedies that may help stop a protectionist drift. Full article

In recent years, the global economy has been hit by a sequence of severe shocks that affected the two largest economies, the USA and the Euro Area, severely. Uncertainties about the future abound. While the challenges are similar for both economies and the policy tools resemble each other, they apply to different economic landscapes. What can they learn from each other? This paper looks at the basic structural facts, the nature of uncertainty shocks, and the efficiency of policy tools in the two economies. The key to understanding recent developments is uncertainty. This paper argues that the channel through which uncertainty influences inflation, wage cost, and unemployment is the markup firms charge to cover their cost of capital. While the measurements of uncertainty are uncertain, adding a proxy for uncertainty can improve the estimates of the basic New Keynesian model. The Federal Reserve Bank has been more successful because it operates in a more integrated capital market. In the Euro Area, uncertainty is higher than in the US and this could make disinflation in Europe more painful in terms of unemployment. Full article