Tan, Sook Rei, Yeap, Xiu Wei, Li, Changtai, Wang, Wei-Siang, and Chia, Wai-Mun (2024) Determinants of international Economic Policy Uncertainty transmission: The role of economic openness. International Review of Economics & Finance, 95. 103467.

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Abstract

This paper investigates the transmission of Economic Policy Uncertainty (EPU) across nations using a two-stage research methodology. In the first stage, EPU spillbacks and spillovers across 20 sample countries are estimated. In the second stage, we employ panel data regression to examine the relationships between economic openness indicators and EPU spillbacks and spillovers in 20 countries, covering the period from 2001Q4 to 2022Q2. The findings indicate that advanced nations are net transmitters of EPU risks, while emerging and developing nations are net receivers. Additionally, the analysis demonstrates a positive correlation between financial openness and EPU connectedness, and a negative correlation between trade openness and EPU connectedness, which suggests that trade openness can help alleviate EPU risk transmission. This paper emphasizes the critical importance of comprehending the transmission effect of EPU and its determinants in assisting policymakers in devising effective policy remedies to counteract external EPU shocks.

Item ID:	83471
Item Type:	Article (Research - C1)
ISSN:	1873-8036
Keywords:	Economic Policy Uncertainty (EPU); Risk transmission; Globalization; Trade openness; Financial openness
Copyright Information:	© 2024 Elsevier Inc. All rights are reserved, including those for text and data mining, AI training, and similar technologies. AAM may be made open access in an Institutional Repository under a CC BY-NC-ND license after a 24 month embargo.
Date Deposited:	27 Aug 2024 00:10
FoR Codes:	38 ECONOMICS > 3801 Applied economics > 380110 International economics @ 100%
SEO Codes:	15 ECONOMIC FRAMEWORK > 1502 Macroeconomics > 150299 Macroeconomics not elsewhere classified @ 100%
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