This study examines the interrelation among gold, oil, and cryptocurrency markets and their implications for economic growth in the context of geopolitical turmoil. Employing panel data from 2000 to 2023 of exporter, importer, and mixed economies, we employ Nonlinear Autoregressive Distributed Lag (NARDL) and Panel Vector Autoregression (PVAR) to ascertain asymmetric as well as dynamic relations. Evidence shows that oil and gold price shocks exert significant effects on growth with geopolitical risk increasing volatility, while cryptocurrencies are heterogeneously resilient in panels. The results provide fresh evidence of cross-asset linkages, risk transmission mechanisms, and provide policy implications for policymakers and investors under volatile geopolitical environments.

Objectives This study examines the relationship between temperature shocks, monetary policy actions, and financial stability in BRICS countries (Brazil, Russia, India, China, and South Africa) using quarterly data from 2000 to 2024. It aims to assess how climate-related temperature fluctuations influence financial stability through monetary transmission channels. Materials and Methods A panel vector autoregression (PVAR) model with country fixed effects is employed to analyse the dynamic interactions among temperature anomalies, monetary policy rates, financial stress indices, inflation, and real GDP growth. Impulse response functions are used to trace the short- and long-term effects of climate shocks on macro-financial variables. Results The findings indicate that positive temperature shocks contribute to financial system instability through increased credit risk, higher equity market volatility, and reduced output growth. Financial stability deteriorates in the quarters following temperature shocks. Monetary policy reacts through interest rate adjustments, but these responses only partially mitigate the negative effects transmitted from climate-related shocks. The dynamic interactions confirm that climate variability influences both macroeconomic performance and financial conditions over time. Conclusion The results highlight the importance of integrating climate risks into macro-financial policy frameworks. Climate-sensitive macroprudential regulation, enhanced stress-testing mechanisms, and stronger coordination between monetary and environmental policies are essential to safeguard financial stability in emerging economies.

ABSTRACT Achieving sustainable economic growth in emerging economies remains challenging due to fragmented policy approaches linking circular economy practices, technological innovation, and renewable energy adoption. This study investigates the dynamic interactions among these sustainability pillars and their implications for long‐term economic development in five emerging Asian economies—Bangladesh, India, Vietnam, Indonesia, and the Philippines. Drawing on Ecological Modernization Theory and Endogenous Growth Theory, the study aims to examine both short‐run trade‐offs and long‐run complementarities among these variables. Using annual panel data from the World Development Indicators (1995–2024), the study employs a Generalized Method of Moments–Panel Vector Autoregression (GMM‐PVAR) framework to capture endogenous relationships, feedback effects, and dynamic adjustments. The findings reveal that technological innovation is the primary driver of sustainable economic growth and exhibits strong self‐reinforcing dynamics while also promoting circular economy development. In contrast, renewable energy adoption and economic growth initially exert negative effects on technological innovation, indicating short‐term trade‐offs; however, these effects transition into positive synergies over time. The circular economy demonstrates gradual and persistent influence across the system, although its short‐term effects remain limited. Furthermore, Granger causality results confirm that renewable energy adoption significantly predicts sustainable economic growth, while variance decomposition highlights the increasing long‐term contribution of circular economy practices and renewable energy. More importantly, the results underscore the importance of a phased and coordinated policy approach that balances short‐term trade‐offs with long‐term sustainability gains. The study contributes to the literature by providing a dynamic, system‐based understanding of sustainability transitions and offers practical insights for designing integrated policy frameworks in emerging economies.

This paper examines how uncertainty shocks influence inflation, the current account, and real activity in emerging EU economies under different monetary regimes. Using quarterly data from 2004Q1 to 2024Q4, it compares countries with monetary autonomy (Poland, the Czech Republic, and Hungary) to Eurozone members (Slovenia, Slovakia, and Estonia). Country-level SVAR models are estimated, and dynamic effects are traced using orthogonalised impulse responses, with additional checks based on an extended sample (Romania, Latvia) and panel VAR results. The findings indicate a regime-specific trade-off. In economies with monetary autonomy, uncertainty shocks result in quicker and stronger inflation responses, consistent with exchange rate pass-through. Eurozone members display more limited inflation effects but experience deeper and more persistent declines in output, along with larger current account improvements driven mainly by weaker demand and reduced imports.

Drivers of carbon dioxide emissions in Brazil, Russia, India, China, and South Africa: a panel vector auto-regression approach

Climate change has emerged as a systemic macroeconomic risk with far-reaching implications for financial flows and economic resilience, particularly in developing regions. This study investigates the dynamic relationship between climate change, macroeconomic sensitivity, and remittance inflows in the South Asian Association for Regional Cooperation (SAARC) countries over the period 2000–2023. Grounded in the climate–migration–remittance nexus, the analysis integrates temperature and precipitation variability with macroeconomic responsiveness and adaptive capacity to provide a comprehensive assessment of how environmental shocks influence remittance behavior. Employing advanced panel econometric techniques—including Cross-sectional Augmented Dickey–Fuller (CIPS) unit root tests, Pesaran’s cross-sectional dependence framework, Panel Vector Autoregression (PVAR), and LASSO regression—the study captures both short-run dynamics and long-run interdependencies across countries. The findings reveal a nuanced relationship: rising temperatures exert a positive and statistically significant effect on remittance inflows, suggesting climate-induced migration and compensatory financial transfers, whereas extreme precipitation shocks (e.g., floods and droughts) disrupt remittance flows by constraining migrants’ earning capacity and financial transmission mechanisms. Furthermore, macroeconomic sensitivity amplifies the transmission of remittance shocks into broader economic outcomes, highlighting the structural dependence of SAARC economies on external income flows. A key contribution of the study lies in identifying adaptive capacity as a critical moderating factor. Countries with stronger institutional frameworks, infrastructure, and financial inclusion exhibit greater resilience, maintaining stable remittance inflows despite climate-induced disruptions. The Granger causality results further indicate a bidirectional relationship between climate change and 415 remittances, underscoring the endogenous nature of this linkage within the macroeconomic system. The study contributes to the literature by offering an integrated empirical framework that links climate variability, macroeconomic responsiveness, and remittance dynamics within a highly vulnerable and remittance-dependent region. From a policy perspective, the findings underscore the need for climate-resilient economic planning, enhanced adaptive capacity, and targeted financial inclusion strategies to safeguard remittance flows as a stabilizing force. Strengthening regional cooperation within SAARC is also imperative to mitigate cross-border climate risks and sustain economic resilience in the face of escalating environmental challenges.

This study investigates the impact of geopolitical risk (GPR) on stock market volatility and returns across six Southeast Asian countries. The motivation stems from the increasing frequency and severity of geopolitical events in recent years, particularly as emerging economies remain highly vulnerable to external shocks. Employing a panel vector autoregression model with exogenous variables (P-VARX), the analysis reveals that market volatility exhibits strong persistence, consistent with the well-documented phenomenon of volatility clustering in the financial literature. Contrary to much of the existing evidence from developed markets, the findings suggest that past geopolitical shocks tend to dampen current market volatility, reflecting a swift adjustment mechanism among investors in Southeast Asia. Furthermore, GPR exerts a positive influence on future stock returns. Impulse response functions and forecast error variance decompositions further elucidate the dynamic and asymmetric relationship between volatility and returns over time. These results offer novel empirical insights, indicating that while Southeast Asian markets are susceptible to geopolitical disturbances, they also demonstrate a remarkable capacity to absorb shocks and recover promptly. The study provides valuable implications for investors and policymakers in formulating effective risk management and investment strategies amidst rising global uncertainties.

Energy security has become a strategic priority for ensuring sustainable economic development, particularly for European Union (EU) countries characterized by high external energy dependence. This study investigates the key drivers of energy security risks in selected EU countries over the period 1995–2018, focusing on economic growth, tourism expenditures, technological innovation, renewable energy consumption, and urbanization. The empirical analysis employs panel vector autoregression and a panel error correction model to examine short- and long-run causal dynamics, while the augmented mean group estimator captures cross-country heterogeneity. The findings indicate that economic growth is the primary short-run determinant of energy security risk, whereas all variables exert significant long-run effects. Country-level results reveal common patterns for growth, renewable energy consumption, and urbanization, but heterogeneous impacts for tourism and technological innovation. These results suggest that strengthening renewable energy adoption, promoting innovation, and supporting sustainable urban development can enhance long-term energy resilience. Overall, this study provides policy-relevant insights for designing sustainability-oriented energy strategies aligned with the European Union’s climate transition goals.

Indonesia’s financial system is bank-centric, with banks managing approximately 78% of the nation’s financial assets; therefore, the effectiveness of monetary policy transmission depends on banks’ responsiveness to the central bank’s interest rate policy (the BI Rate). However, a policy-relevant anomaly persists: deposit rate pricing is more strongly anchored to the Deposit Insurance benchmark (IDIC Rate) than to the BI Rate. This study argues that this research is significant because it identifies a “Dual Benchmark System” that traditional single-anchor models fail to address, representing a critical friction in emerging market transmission. This study examines this dual-benchmark paradigm and the associated asymmetric risks using a panel VAR with a Generalized Impulse Response Function (GIRF) on quarterly data for 63 commercial banks from 2010 to 2024. The results indicate that IDIC Rate shocks have a larger and more persistent effect on deposit rates than BI Rate shocks, generating asymmetric transmission risks. This dominance creates a structural “price ceiling” that keeps funding costs high, ultimately raising lending rates for borrowers and distorting deposit growth rates. Furthermore, this analysis reveals that external policy signals are far more influential than internal financial performance. This suggests that under the Basel III framework and prevailing financial regulations, banks prioritize liquidity compliance and safety net protection over internal operational efficiency. Macroeconomic shocks remain weaker than policy shocks and dissipate more quickly. This finding reveals a potential systemic coordination risk, implying an urgent need for tighter policy coordination between the Central Bank and the IDIC to reduce structural frictions, maintain transmission effectiveness, and protect long-term financial stability.

Natural disasters are major threats to economic and human development, often leading to substantial disruptions in growth and welfare, particularly in developing countries. Focusing on twelve small island economies in the Caribbean, this paper examines the effects of natural disasters between 1992 and 2019 on key indicators of economic performance and development. Using a disaggregated empirical approach and satellite-based night-time light data, we estimate fixed-effects OLS models including a full set of country, region, and year effects, as well as country- and region-specific linear trends. The results indicate that natural disasters cause a significant contraction in local economic activity and in the rate of economic development. Complementary estimates from a Panel Vector Autoregression model show that these negative effects persist for up to four years after disaster events. Moreover, countries with higher income per capita, stronger institutions, greater political stability, and a higher degree of trade openness are found to be more resilient to disaster shocks. The study concludes by identifying structural factors that can strengthen macroeconomic resilience and by providing policy-relevant insights for mitigating the economic consequences of natural disasters.

South Asia faces a critical challenge in balancing economic growth with environmental sustainability, especially amid mounting global concerns over climate change. This study examines the long-term relationships between digital trade, green technology investment, financial inclusion, natural resource rent, and carbon dioxide emissions in South Asian economies from 2003 to 2023. Using the Generalized Method of Moments–Panel Vector Auto Regression (GMM-PVAR) model, the study captures both dynamic interactions and causal linkages among the variables. The findings reveal that lagged carbon emissions significantly reduce current emissions, indicating a corrective mechanism influenced by regulatory and economic adjustments. Both green technology investment and digital trade substantially reduce carbon emissions. However, financial inclusion tends to increase emissions due to greater economic activities in carbon-intensive industries. Natural resource rent does not significantly impact carbon emissions. Causality analysis confirms both unidirectional and bidirectional causal relationships, highlighting the significance of legislative actions to balance environmental sustainability and economic prosperity. These findings provide valuable insights for policymakers in South Asia and beyond, emphasizing the need for strategic investments in green innovation and digital infrastructure to achieve sustainable development goals.

This paper investigates the transmission of monetary policy to real output, inflation, and housing markets in twelve European countries over the period 1995Q1-2025Q2. The paper emphasizes the importance of housing markets in the transmission mechanism of monetary policy and calls for a forward-looking policy approach that incorporates housing-related vulnerabilities into central bank decision-making. The study employs a pooled panel Vector Autoregression model with sign restrictions to identify the effects of both interest rate and money supply (M3) shocks, as well as a combined policy mix. The results confirm that housing markets constitute a central channel through which monetary policy shocks affect the real economy. Real house prices demonstrate the most significant and enduring responses, exceeding those observed in output and general price levels. Furthermore, the analysis reveals asymmetries in the transmission mechanism: contractionary shocks generate larger and longer-lasting effects than expansionary ones, particularly in the housing sector. These findings underscore the disproportionate impact of restrictive monetary policies and the associated risks for affordability, wealth distribution, and financial stability. The study concludes that housing dynamics should be more systematically integrated into monetary and macroprudential policy frameworks, especially in light of the persistent vulnerabilities linked to ultra-low interest rates and money supply expansions.

ABSTRACT Considering the complex linkages between exchange rate pass‐through, energy prices, and inflation, involving monetary policy interactions in inflation‐targeting and non‐targeting economies, we examine the effect of exchange rate pass‐through, the central bank's inflation management, and money on aggregate energy price for a sample of 25 countries using panel VAR and Bayesian VAR techniques. Results show that exchange rate pass‐through, inflation, oil prices, and liquidity are causally linked, with oil prices impacting inflation, liquidity, and policy rates. We also find that countries that enforce inflation targeting in monetary policy can better manage sudden inflation by a readjustment in policy rates. The findings have insightful consequences for policy‐making authorities.

Market reactions to new aircraft deployment in China’s domestic Aviation: A panel vector autoregression analysis of C919

Energy poverty remains a persistent challenge in many developing economies, constraining socioeconomic development and diminishing quality of life. This study examines the impact of foreign direct investment (FDI) and trade openness (TO) on energy poverty reduction in seven Latin American countries—Belize, Bolivia, Honduras, Mexico, Nicaragua, Panama, and Peru—over the period 1992–2024. Employing a Panel Vector Autoregression (PVAR) framework, the analysis reveals that both FDI and trade openness significantly enhance electricity access, which serves as a key proxy for energy poverty. Specifically, a 1% increase in trade openness leads to a 0.083% improvement in electricity access, while FDI exerts a substantially stronger effect, increasing access by 2.325%. Economic growth also contributes to energy poverty alleviation, albeit with a more modest elasticity of 0.195%. Granger causality tests indicate bidirectional causal relationships between trade openness and energy poverty, as well as between energy poverty and FDI inflows, suggesting the presence of a virtuous cycle whereby improved energy access fosters deeper economic integration. Additional feedback effects are identified between trade openness and economic growth, and between FDI and economic growth. Moreover, trade openness is found to directly stimulate FDI inflows, while economic growth unidirectionally reduces energy poverty. The robustness of these findings is confirmed through FMOLS and DOLS estimations. Overall, the results highlight the critical role of globalization in alleviating energy poverty in Latin America. Policy implications emphasize the need to reduce trade barriers for renewable energy technologies, promote green-oriented FDI, and channel economic growth toward expanding rural electrification. Nonetheless, the study’s reliance on electricity access as a single proxy for energy poverty and its regional focus point to avenues for future research, including the use of multidimensional energy poverty indices and cross-regional comparative analyses. Keywords: Energy poverty; electricity access; trade openness; foreign direct investment; globalization; Latin America.

Stock market efficiency plays a vital role in financial economics, as it reflects how quickly and accurately asset prices incorporate available information. This study investigates stock market efficiency and banking sector stability in the MENA region, focusing on the dynamic interactions between macroeconomic indicators, financial depth, and bank-specific variables. Using panel data from 21 countries over the period 2003–2021, the analysis employs both fixed-effects regression and a Panel Vector Autoregression (PVAR) framework to capture cross-country heterogeneity, temporal dynamics, and systemic interdependencies. The findings reveal that traditional macroeconomic variables, including inflation, GDP per capita, and domestic credit to the private sector, exert limited direct influence on banking sector stability as measured by the Z-score. Instead, the results highlight the importance of country-specific characteristics, institutional quality, and regulatory frameworks in shaping financial resilience across MENA countries. Overall, the findings confirm that effective risk management plays a central role in strengthening bank stability. By enhancing financial resilience, improving operational discipline, and reducing vulnerability to economic and financial shocks, sound risk management practices support the ability of banks to maintain consistent performance over time. The results further suggest that stability is not solely driven by internal mechanisms but also depends on the broader economic and institutional environment in which banks operate. Together, these elements reinforce the capacity of banking systems to contribute to long-term financial stability in the region.

Background: Despite the growing importance of stress testing as a supervisory tool, its role in reducing information opacity and improving credit risk management remains underexplored in ASEAN’s dual banking system, where Islamic and conventional banks operate under distinct financial structures. Method: Using a Panel Vector Autoregression (PVAR) model with Generalized Method of Moments (GMM), this study analyses 72 listed banks across five ASEAN countries over 2012–2022. Credit risk is proxied by NPL/NPF ratios, incorporating key macroeconomic and bank-specific variables. Results: The findings indicate that credit risk dynamics are highly persistent, with own shocks accounting for more than 97% of forecast error variance in both banking systems. GDP growth and real interest rates emerge as the most influential macroeconomic determinants. Islamic banks display mean-reverting credit risk behaviour, whereas conventional banks exhibit greater persistence. Impulse response analysis reveals that macroeconomic shocks have statistically significant but heterogeneous effects across bank types. In addition, Granger causality results suggest that macroeconomic variables can serve as early warning indicators of credit risk. The COVID-19 period provides additional evidence that stronger capital buffers help mitigate the transmission of macroeconomic shocks to NPL ratios. Conclusion: These results support the role of stress testing as a tool for improving risk assessment and strengthening supervisory oversight in ASEAN banking systems. This study contributes by providing the first PVAR-based comparative analysis of stress testing in ASEAN’s dual banking system, incorporating the COVID-19 shock as a natural experiment, and offering cross-country evidence on the role of stress testing in improving financial transparency.

ABSTRACT The international co‐movement of interest rates reflects correlated business‐cycle fluctuations, largely driven by demand shocks. Monetary policy in advanced economies follows domestic mandates—inflation and the output gap—and does not respond to foreign policy shocks. We derive this result from a Bayesian structural panel vector autoregression with informative priors, homogeneity restrictions on contemporaneous relations, a hierarchical Minnesota prior with cross‐sectional shrinkage, and a factor structure for structural shocks.

Earnings and price forecast with ARIMA and panel VAR time-series models

ABSTRACT As Southern African economies continue to struggle with achieving Sustainable Development Goal 1 (eradicating poverty), there is an increasing need for strong collaboration between public and private sectors to accomplish this goal, as the public sector cannot achieve it alone. Based on this, this study examines the influence of public‐private partnership investments (PPPI) on poverty and its severity in Southern African economies from 2000 to 2019. We employed the Panel Vector Autoregressive (PVAR) model approach. The PPPI was categorized into investments in energy and transport. We find that the contributions of PPPI in energy and transport to the reduction of poverty and its severity are extremely small, suggesting that PPPI in these sectors has a negligible immediate effect on poverty and its severity. The study recommends long‐term PPPI strategies in energy and transport to reduce poverty and its severity by enhancing accessible and affordable infrastructures in these sectors and beyond. Theoretically, this work pioneers the systematic application of the Panel Vector Autoregressive (PVAR) model to sectoral Public‐Private Partnership Investments (PPPI) and confirms that poverty persistence in the region is consistent with Poverty Trap theories; politically, it provides crucial evidence compelling Southern African governments to adopt long‐term, integrated strategies that address structural inequalities and policy coherence beyond short‐term infrastructure investments.