Details

Autor(en) / Beteiligte

• Al‐Thaqeb, Saud Asaad
• Algharabali, Barrak Ghanim
• Alabdulghafour, Khaled Tareq

Titel

The pandemic and economic policy uncertainty

Ist Teil von

• International journal of finance and economics, 2022-07, Vol.27 (3), p.2784-2794

Ort / Verlag

Chichester, UK: John Wiley & Sons, Ltd

Erscheinungsjahr

2022

Link zum Volltext

Quelle

Business Source Ultimate

Beschreibungen/Notizen

• The events that occurred after the worldwide diffusion of COVID‐19 provide a real‐life example of how uncertainty can severely affect the global economy. This paper reviews literature on the negative impacts of the economic policy uncertainty index (EPU) on individuals, businesses, governments, and economies at the local and international levels. This reveals that a high EPU is associated with adverse effects on households, corporations, and governments, which tend to delay many financial decisions under high uncertainty, which leads to lower consumption, fewer issuances of debt, fewer investments, and higher unemployment. The effects of political and regulatory uncertainty also extend to the commodity markets, such as the adverse effects on both oil and gasoline markets, and can potentially create adverse impacts on the crypto‐currency market and its potential growth. We demonstrate that governmental uncertainty also affects financial, housing, and equity markets; debt issuances; and the entire economy. This underscores the importance of considering EPU as a risk factor. The association with several components of the global economy reflects not only the EPU index's critical influence, but also the importance of risk management. Our results lead us to consider the gravity of economic policy uncertainty and call for innovation across different sectors to mitigate its adverse effects.