Exploring the interconnectedness of oil, gold, cryptocurrencies, and economic growth in geopolitical uncertainty: An econometric analysis

The study examines asymmetrical effects of ups and downs in oil price on Iran's economic growth from 1990 to 2022, which also includes unemployment and inflation as major macroeconomic factors. The nonlinear autoregressive distributed lag (NARDL) model was employed to examine the effects of positive and negative shocks of oil price on the economic growth. Conclusions make a contribution to the literature on the economic implications of oil price fluctuations, especially in oil -dependent economies such as Iran. The results of the unit root tests indicate that variables are integrated of different orders, which justify the use of the NARDL approach. Structural break tests highlight significant economic changes in the period analyzed in Iran, especially for oil prices in 2012 and 2017, for unemployment for 1994 and 1998, and for inflation in 2012 and 2002. Furthermore, the findings confirm the presence of long -term relationship between oil price fluctuations and economic growth. The results for short -term estimation suggest that a positive oil price shock adversely affects economic growth, while the negative oil price shock has an insignificant effect. Unemployment plays an important role, with positive shock in unemployment showing a strong negative effect on economic growth. Inflation pressure, both positively and negatively, has a small effect. Long -lasting results confirm the asymmetrical effects of oil price movements, a shock of positive oil price adversely affects the GDP growth, while negative oil price shows an insignificant effect.

This study investigates the symmetry and asymmetry impact of oil price shocks on economic growth for the Iraqi economy during 1968-2019. For this purpose, we utilizing Linear Autoregressive Distributed Lag (ARDL) and Nonlinear Autoregressive Distributed Lag (NARDL).  The linear and nonlinear ARDL found that oil price shocks have a positive long-run impact on economic growth, as the F statistics are greater than the critical upper bound in all models. Moreover, the results of NARDL estimators show the asymmetry evidence: the oil price increases(LROILP+) have a greater and significant positive impact on real GDP per capita, While oil Price decrease coefficients(LROILP-) are insignificant and smaller than the oil price increase(LROILP+). That means an increase in oil price leads to raises in real GDP per capita. Consequently, the Iraqi economy and its Standard of living in terms of GDP per capita are sensitively affected by oil price changes due to the strong tide with world oil price changes. Then, diversify of the Iraqi economy, only the best choice in front of policymakers.

Symmetric and asymmetric effects of gold, and oil price on environment: The role of clean energy in China

This empirical study intends to examine the behavior of oil price on Malaysian economic growth whether nonlinearity implies. The dynamic models of Linear and Nonlinear Autoregressive Distribution Lags (ARDL and NARDL) are used to estimate the models. The study used annual data over the period of 1975 to 2015. The study used the real Malaysian spot oil price (Miri) as oil price unlike. The results from linear model revealed that oil price positively increase economic growth both in the short-run and the long-run. To achieve our objective, the NARDL estimator was used to detect the impact of positive and negetive changes in oil price. The results reveal that there is nonlinear relation among the variables in the long-run relationship as the evidence of cointegration was found. Increases in oil price boosts economic growth positively while a decrease in oil price is not as indicate insignificant. The error correction term confirms the results as indicate negative, significant and less than 1 percent. That is the speed of adjustment after the oil price shock. The results have important policy implications, exposed that the impacts of oil price changes (positive and negative) are not necessarily equal.

Crude oil is one of the most important inputs for production activities, and an increase in its price has a crucial effect on economic growth both in developing and developed countries and Somalia is not an exception. To this end, this undertaking models the asymmetric impact of crude oil price on economic growth in Somalia using the nonlinear Autoregressive Distributed Lag (NARDL) model with annual time series data stretching from 1990 to 2018. The empirical results of the study revealed that oil price asymmetrically affects economic growth in Somalia both in the short and long runs. A positive oil price shock is inconsequential in the long run but impedes economic growth in the short run, while a negative oil price shock has a constructive role in stimulating economic growth in the long run but not in the short run. Nevertheless, the study suggests the implementation of economic diversification towards utilizing other types of energy other than oil and designing policies aimed at increasing energy investments.

Even though numerous studies explore the impact of macroeconomic variables on carbon dioxide (CO2) emissions, only a few existing studies estimate the asymmetric impact and causality. By considering the significance of asymmetries, this study investigates the asymmetric impact of economic growth, energy use, and foreign direct investment inflows on CO2 emissions in India wherein oil prices are included as additional variable. The kinked exponential growth of these variables over the period 1986-2014 is also estimated. To this end, nonlinear autoregressive distributed lag (NARDL) model and asymmetric causality test are used. The results show that increase in economic growth would decrease CO2 emissions, while a reduction in economic growth would increase CO2 emissions which implies an inverted U-shaped link between economic growth and CO2 emissions. The positive and negative shocks in oil prices have a favorable and significant impact on CO2 emissions as well. Furthermore, the energy consumption with positive shock shows a positive and significant impact on CO2 emission. Besides, the findings of foreign direct investment inflows support the pollution heaven hypothesis. In light of these results, this study also suggested some policy implications and future research avenues in the concluding section.

In this study, the impact of the crude oil price on economic growth is investigated in seven middle-income oil-importing countries in sub-Saharan Africa (SSA), namely Botswana, Kenya, Mauritania, Mauritius, Namibia, South Africa, and Zambia. The estimation is based on both linear and non-linear panel autoregressive distributive lag (panel ARDL) models. The real oil price is decomposed into negative oil price shock and positive oil price shock in order to examine the non-linear impact of oil price on economic growth. Using an annual dataset from 1990 to 2018, it was found that in the symmetric model the oil price has a positive and significant impact on economic growth in the long run. The short-run estimates, however, show that the oil price has no significant impact on economic growth. The overall results from the asymmetric model also show that there is a non-linear relationship between oil price and economic growth in the studied countries.

Futures, as significant financial derivatives, play a crucial role in financial markets by fulfilling price discovery functions and providing efficient risk hedging tools. Against the backdrop of geopolitical conflicts, market risk emerges not only from external shocks and random fluctuations but also from strategic interactions among diverse participants including hedgers, speculators, arbitrageurs, and regulators. This study integrates traditional VaR theory with machine learning methods to systematically examine risk characteristics and transmission mechanisms in the sugar futures market under geopolitical uncertainty. Utilizing sugar No. 5 futures trading data from the Zhengzhou Futures Exchange spanning 2015–2019 and 2024, we employ a Random Forest model for feature importance analysis and compare three risk measurement approaches: traditional parametric VaR, historical simulation methods, and machine learning-enhanced VaR models. We conduct empirical tests to validate the theoretical relationship √3 × VaR T (1, p ) ≈ VaR T (3, p ) and calculate epsilon values (relative deviation between actual and estimated tail risk occurrences) through return tests. Annual delta values range between 0.26 and 1.16, averaging approximately 35% below theoretical values. The machine learning-based Value at Risk (VaR) at 95% confidence level exhibits a violation rate of 5.00%, demonstrating superior accuracy compared to parametric VaR (26.67%) and traditional historical VaR (7.00%). Epsilon values show no statistically significant difference between 2024 (0.08) and the 2015–2019 average level (0.14), indicating stable risk transmission mechanisms despite geopolitical conflicts. The hybrid “machine learning-traditional theory” risk framework developed in this research provides a theoretical foundation and practical guidance for regulatory bodies to enhance risk prevention and control systems, as well as for market participants to optimize risk management strategies. Despite geopolitical impacts, the fundamental risk transmission mechanisms of the sugar futures market remain relatively stable, demonstrating market resilience.

This study investigates the asymmetric interaction between oil price shocks and stock returns and market volatility in a heterogeneous panel of economies using the Nonlinear Autoregressive Distributed Lag (NARDL) panel model. Though the relationship between oil prices, market volatility, and stock returns has been thoroughly studied, the asymmetric effects—the manner in which positive and negative shocks have impacted stock returns differently—are not so extensively studied. By exploiting high-frequency data for multiple markets, we distinguish the short- and long-horizon asymmetries in oil price shock and volatility transmissions to equity returns. We find that positive shocks to oil prices have a stronger and longer-lasting impact on equity returns than negative shocks, highlighting the implicit market reaction asymmetry. Similarly, we observe that market volatility increases have a stronger negative effect on stock returns compared to decreases, indicating the existence of risk aversion and investor sentiment. The panel NARDL approach enables us to account for cross-sectional heterogeneity and time effects and thus derive strong evidence of asymmetric spillovers. These results are of concern to policymakers, portfolio managers, and investors since they yield insights into the selection of risk management policy and policy formulation with regard to offsetting the adverse effect of oil price volatility and market uncertainty on financial markets.

PurposeOil is crucial for industrial development. This paper investigates the impacts of oil price changes on China's industrial growth and examines whether the impacts are asymmetric. The estimations can help determine how oil price shocks are transmitted throughout the economy.Design/methodology/approachThis paper adopts West Texas Intermediate (WTI) crude oil price and industrial sector output and uses monthly data. The recently developed nonlinear autoregressive distributed lag (NARDL) model is employed to illustrate the effects in both the short term and long term. Importantly, under NARDL framework, this paper examines whether the impacts are asymmetric by decomposing oil price shocks into their positive and negative partial sums.FindingsThe empirical results prove clear evidence of asymmetries in the short term, long term or both terms. Specifically, some sectors benefit from, rather than suffer from higher oil prices, even some energy-intensive sectors, i.e. C31 (Smelting and Pressing of Ferrous Metals) and C32 (Smelting and Pressing of Non-ferrous Metals). However, the effects on some other energy-intensive sectors appear insignificant. Additionally, the results prove significantly negative responses in some sectors in the long term, and most of these sectors are in the top half of the ranking by energy consumptions.Originality/valueThis paper studies the economic responses at a disaggregated level by employing industry-level data. NARDL method is used to decompose oil price changes into their increases and decreases and investigate the asymmetries in the impacts of oil price changes.

The study is empirically motivated to analyze the link between trade openness, inflation, exchange rate and economic growth among the OPEC countries by using key macroeconomic variables across member countries. The study utilizes quarterly time series data for variables including economic growth, trade openness, exchange rate, consumer price index and oil price as exogenous variable in the system for over 164 quarterly data points. Utilizing the recently introduced model of Ambrigo and Inessa (2015), the study uses panel vector autoregression model and analyze how various shocks affect macroeconomic stability of the member countries. Trading shock as well as oil price shock are analyzed and responses of other macroeconomic indicators are evaluated. Based on the estimated result for impulse response and forecasted error variance decomposition result, the study established statistically significant link between trading shock and economic growth of the member countries while oil price shock is found to have significant but weak relationship with economic growth. Babed on the finding established, the study recommends that trading shocks is the main driver of cyclical fluctuation of the OPEC's member countries economic growth. Policies are therefore prescribed to smoothen the impact of trading shocks on the economic growth of the member countries.

Asymmetric relationship between crude oil price and remittance inflows in a small island economy: Evidence from non-linear ARDL approach

This study examines the impact of global food and oil price shocks and their transmission channels to the selected macroeconomic variables including the inflation rate, output, money balances, interest rate and real effective exchange rate forPakistan using monthly data over the period 1990M1–2011M7. An empirical analysis is carried out by employing a structural vector autoregressive framework to identify different structural shocks and explore the relative contribution of oil and food price shocks. Generalised impulse response functions and generalised forecast variance decompositions are employed to track the impact of oil and food price shocks onPakistan's economy. The results suggest that oil price shocks negatively affect industrial production, appreciates real effective exchange rate and positively affect inflation, either the shocks are positive or negative. Only the oil and food price shocks have asymmetric impact on the short‐term interest rate. In contrast, following the positive (or negative) food price shock, industrial output, interest rate and inflation rate respond positively. However, the variation in interest rate due to food price shock is relatively larger than that of oil price shocks. Generalised impulse response functions reveal that real effective exchange rate is the most important source of disturbances following either oil price or food price shocks. Generalised forecast variance decompositions analysis also supports the findings based on generalised impulse response functions. The results clearly reveal that oil and food price shocks significantly affect output, short‐term interest rate, inflation rate and the real effective exchange rate. However, among all, real effective exchange rate has been a dominant source of variation inPakistan. This implies that supply‐side and demand‐side disturbances originated by external shocks are the major sources of variation in output and inflation inPakistan.

This study investigated the asymmetric impact of oil price on remittances in oil‐exporting and ‐importing nations in sub‐Saharan Africa (SSA). The study adopted the nonlinear autoregressive distributed lag (NARDL) technique for 22 SSA countries. The study found that in oil‐importing countries, positive shocks in oil prices boost the influx of remittances, whereas a fall in oil prices reduces remittances. For oil‐exporting nations, the result indicates that the influence of a positive shock in oil price on remittances, in the long‐run, is sensitive to the measure of oil price (Brent and West Texas Intermediate). However, in the short‐run, adverse oil price shocks decrease the inflow of oil‐importing nations' remittances while it enhances the inflow of remittances into oil‐exporting nations. Based on these findings, the study recommends that oil‐importing nations use the increase in remittances to promote economic activities to lessen the adverse effect of an upsurge in international oil prices. By contrast, oil‐exporting nations need to use the rise in oil revenue to cushion the decrease in remittances due to oil price shock.

This study investigated the asymmetric effect of oil price shocks on stock market performance in Nigeria. Secondary data covering the period between 1986 and 2019 were employed for this study. Quarterly data of brent crude price, all share index, real exchange rate and inflation rate were sourced from Central Bank of Nigeria Statistical Bulletin (2019), OPEC Statistical Bulletin (various publications) and Nigerian Stock Exchange Fact Book (2019). Data collected were analysed using Non-Linear Autoregressive Distributed Lag (NARDL). The NARDL results showed that in the long run, positive oil price shocks, (t= 5.39; p<0.05) had significant positive effect on stock market performance. Negative oil price shocks (t= 5.81; p<0.05) had significant positive impact on stock market performance. In the short run, current period negative oil price shock (t= 2.01; p<0.05) exert significant positive effect on stock performance while previous period positive oil price shocks (t= 1.94; p<0.05) pose significant positive effect on stock market performance in Nigeria. The study concluded that oil price shocks is a deterrent to stock market performance in Nigeria and the impact of oil price shocks on growth rate in Nigeria is both positive and negative. Keywords: Oil Shocks, GDP, Asymmetry, Stock Market, Stock Performance, NARDL DOI: 10.7176/JESD/12-14-09 Publication date: July 31 st 2021