Abstract
Given the concerns arising from climate change, countries, regions, and organizations worldwide have developed and implemented policy frameworks and measures aimed at addressing the challenges posed by climate change. However, the implementation pathways of these policies may entail significant uncertainties, presenting challenges to economic development. This study uses the vector autoregressive (VAR) model to examine the influence of climate policy uncertainty (CPU) on the U.S. economic cycle. The economic cycle variables are extracted from four popular economic indicators based on the Hodrick-Prescott (HP) filter. The results show that CPU changes effectively impact economic cycle, and a positive CPU shock can trigger negative reactions in the economy (recession) in the subsequent period. Moreover, we find that CPU changes are a Granger cause of the economic cycle and have good prediction classification performance for economic expansions and recessions. We provide new insights into the relationship between CPU and the economic cycle for policymakers.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
