The effects of economic policy and political uncertainties on economic activities

This paper explores the dynamic effects of economic policy uncertainty (EPU) and political stability (PS) on business fixed investment (BFI), real estate activities (RE), financial market activities (FIN) and patent applications (PAT) using annual data from 19 major high-income and emerging economie...

Full description

Saved in:
Bibliographic Details
Published inResearch in international business and finance Vol. 48; pp. 210 - 218
Main Author Gholipour, Hassan F.
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.04.2019
Subjects
Capital Investment
Innovation
Real estate market
Uncertainty
Real estate market
R3
Uncertainty
Innovation
E22
Capital Investment
D80
O30
G18
Online AccessGet full text

Cover

More Information
Summary:This paper explores the dynamic effects of economic policy uncertainty (EPU) and political stability (PS) on business fixed investment (BFI), real estate activities (RE), financial market activities (FIN) and patent applications (PAT) using annual data from 19 major high-income and emerging economies from 1996 to 2016. By applying panel vector autoregression (PVAR) and dynamic least squares (DOLS) methods, the results show that a positive shock to EPU triggers a negative response from BFI, RE, FIN and PAT in the short-run. In addition, I find that higher levels of EPU significantly decrease BFI, RE and FIN in the long-run. The findings also suggest that BFI, RE and PAT respond positively to a shock in PS in the short-run and there is a positive, long-run relationship between PS, RE and FIN.
ISSN:0275-5319
1878-3384
DOI:10.1016/j.ribaf.2019.01.004