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Öğe Agricultural methane-environment thesis in poor African countries: which environmental curve is valid?(Springer, 2023) Olasehinde-Williams, GodwinThis study attempts to empirically establish the environmental curve that is applicable to the nexus between agricultural methane emissions and the environment in poor sub-Saharan African countries. The empirical analysis is conducted on annual data spanning 1990–2019 for 25 sub-Saharan African countries classifed as heavily indebted by the International Monetary Fund. Continuously updated fully modifed estimation and bootstrap panel causality testing are employed for the analysis. The results from the continuously updated fully modifed estimation show that the coefcients for per-capita income and its quadratic form are?0.446 and 0.011, respectively. This indicates that there is a U-shaped relationship between agricul tural methane emissions and per-capita income in these poor sub-Saharan African countries. This U-shaped relationship is indicative of the environmental Brundtland curve. As suggested by the environmental Brundtland curve, this study shows that at lower levels of per-capita income, agricultural methane emissions are usually high in sub-Saharan Africa. As income improves, emissions gradually decline until a turning point beyond which further improvements in income again begin to aggravate agricultural methane emissions. It is thus concluded on this basis that the nature of the environmental curve refect ing the income-agricultural methane emissions nexus is a function of the economic status of the country or region under consideration. Moreover, the bootstrap panel causality results further show that feedback causal relations are predominant across countries in the link between per-capita income and agricultural methane emissions. This outcome is indicative of a vicious cycle in which poverty aggravates pollution, and pollution in turn further aggravates poverty. It also buttresses the claim that the poor are both perpetrators and victims of environmental degradation. The fndings emphasize the need for a green growth path in sub-Saharan Africa that is capable of preventing the return to a positive relationship between income and emissions beyond the turning point in the Brundtland curve.Öğe Carbon efficiency in China: Should we be concerned about the shadow economy and urbanization?(John Wiley and Sons Ltd, 2023) Pata, Ugur Korkut; Olasehinde-Williams, Godwin; Ozkan, OktayReducing carbon emissions is critical to achieving a carbon-neutral world according to the Glasgow Climate Pact, but production, and thus carbon emissions, must continue to meet the needs of the world's growing population. Minimizing carbon emis sions per production, that is, increasing carbon efficiency is one way to support the Sustainable Development Goals. Therefore, studying the determinants of carbon efficiency for China, the largest global polluter, is important for zero carbon goals. To this end, this study examines the effects of the shadow economy, globalization, trade openness and urbanization on carbon efficiency using novel dynamic autoregressive distributed lag simulations for China during 1990–2018. The empirical results illustrate that (i) the environmental Kuznets curve (EKC) hypothesis is not valid; (ii) Shadow economy, trade openness and urbanization reduce carbon efficiency and (iii) Globalization enhances carbon efficiency. Based on these results, it is suggested that the Chinese government should combat the shadow economy to increase carbon efficiency, regulate unplanned and polluting urbanization in a green manner, reduce carbon intensity in foreign trade, and benefit from environmental technologies provided by globalizationÖğe Carbon pricing and aggregate macroeconomic performance in the Eurozone: a contribution to the climate policy debate using the EU ETS and Macroeconomic Performance Index(Springer, 2024) Olasehinde-Williams, GodwinThis article contributes to the carbon pricing debate by providing new evidence on the aggregate macroeconomic effect of the European Union Emissions Trading Scheme (EU ETS) in the Eurozone. To this end, a novel macroeconomic performance index is created to capture the overall economic performance of the Eurozone countries. The index is a weighted aggregation of key macroeconomic variables—GDP growth rate, inflation rate, employment rate, exchange rate, and long-term inflation rate—for the 19 member countries of the group. The effect of the EU ETS on this macroeconomic performance index is then empirically examined while controlling for the effects of physical capital accumulation, human capital accumulation and regulatory quality. A panel framework covering the period 2005–2022 is set up to achieve this objective and the relationship is examined using panel method of moments quantile regression with fixed effects, as well as fixed and random effects regressions of Driscoll and Kraay. A number of important revelations are made. Firstly, the behavior of the macroeconomic performance index constructed clearly reflects the economic reality of the Eurozone, with downward spikes visible in periods corresponding with the economic crisis of 2007–2009, the Eurozone debt crisis of 2010/2011, the aftermath of the financial crisis of 2016, and periods around the outbreak of the Coronavirus (COVID-19) pandemic. Hence, a case is made for the use of the macroeconomic performance index as a superior aggregate measure of the overall economic performance in empirical research. Secondly, a statistically significant negative effect of the EU ETS on aggregate macroeconomic performance in the Eurozone is confirmed. This shows that there are significant economic costs associated with the use of carbon pricing as a means of lowering pollution. Thirdly, the findings further show that the negative impact gradually decreases (in absolute values) from lower to higher quantiles. Overall, higher carbon prices cause greater economic disruption when macroeconomic performance is relatively poor but have less damaging effect when aggregate economic performance is relatively strong. Policy recommendations based on the study findings are also provided.Öğe A consideration of the environmental externality of Turkey's integration into global value chains: evidence from dynamic ARDL simulation model(SPRINGER HEIDELBERG, 2022) Olasehinde-Williams, Godwin; Özkan, OktayThe phenomenal growth experienced by Turkey at the turn of the millennium is attributed in part to increased participation in global value chains. While participation in global value chains has been benefcial to the Turkish economy, it also poses unique environmental challenges. Consequently, this study focuses on shedding some light on the environmental externality of Turkey’s participation in global value chains. This article examines the environmental efects of Turkey’s participation in global value chains for the period 1990–2018, using a dynamic ARDL analysis. The study further compares the environmental efects of Turkey’s backward and forward linkages into global value chains, so as to determine which contributes more to carbon emissions. The cointegration test results and dynamic ARDL simulations confrm the existence of a long-run relationship between the environment and global value chain participation. All measures of global value chain participation display a positive long-run impact on carbon emissions. The results also show that the polluting efect of backward and forward linkages into global value chains is not too diferent. The study fnding suggests that Turkey is being assigned segments of the value chain that require dirtier production processes through incentives from global trade integration, thus making Turkey a pollution haven. It is concluded that this is because other countries continually source for inputs requiring dirty production processes from Turkey, as Turkey also exports fnal goods that are produced using eco-unfriendly techniques. Policymakers in Turkey therefore need to follow more environmentalist policies in the process of global value chain participation.Öğe Crude oil price volatility - An unintended consequence of carbon pricing: Evidence from transfer entropy and wavelet-partial wavelet coherence analyses(SAGE Publications Inc., 2024) Olasehinde-Williams, GodwinThe urgent need to achieve the COP-27 targets has become evident due to the more frequent and severe climate-induced disasters and their socioeconomic consequences. The adverse effects of climate change highlight the need for an immediate shift away from fossil fuels without compromising economic development. Internalization of the negative externality in market transactions through the imposition of carbon pricing is widely touted as the most economically efficient means of solving this problem. This study, however, argues that crude oil price volatility could be an unintended consequence of carbon pricing. To this end, information flows between the European Union Emissions Trading Scheme and crude oil price volatility are examined through transfer entropy and wavelet-partial wavelet coherence analyses. Daily data from January 1, 2014 to July 1, 2023 are analyzed. The transfer entropy results show that information on carbon pricing reduces uncertainty about crude oil price volatility and vice versa, indicating that carbon pricing would be quite informative in building models to predict crude oil price volatility. The wavelet-partial coherence analyses reveal that the surge in carbon prices experienced in the late 2010s induced crude oil volatility, whereas the crude oil price volatility triggered by the COVID-19 pandemic forced carbon prices down. This study therefore identifies carbon price movements as a legitimate fear for policymakers, as it is a new source of volatility in conventional energy markets. Caution should thus be the watchword regarding optimal carbon pricing. Aiming to rapidly attain the full optimal carbon price is not recommended. Rapid changes in carbon prices will have strong redistributive implications across economies.Öğe Do Fiscal Policy Outcomes Promote Ethno-Religious Stability in African States?(Springer, 2024) Olasehinde-Williams, Godwin; Bekun, Festus VictorThis paper studies the conditions under which the use of expansionary fiscal policy may mitigate the risk of initiation, escalation, and repeated cycles of conflict on the African continent. To date, empirical evidence highlighting the effectiveness of expansionary fiscal policy as a means of mitigating conflict in Africa is still limited. This article is an attempt to fill this gap as it addresses this important empirical question in conflict-plagued Africa. The study further expands on previous studies by examining the efficacy of increased government expenditure on conflict in general, as well as on the ethnic and religious dimensions of conflict in Africa. The most encountered forms of conflict in recent times are those that cannot be neatly classified as war, peace, criminal violence or political violence. Ethnic and religious conflicts often fall into this class. This study finds that overall, non-military government expenditures across African states have played a significant role in minimizing general internal conflict, as well as ethnic and religious conflicts. Using data for 32 African nations for the period 1990–2016, the empirical analyses show that raising overall government expenditure can induce reductions in overall internal, ethnic and religious conflicts. The results suggest that total government expenditure has a stronger impact on the reduction of ethnic conflict on the continent. Empirical outcomes also show that causality varies across countries on the continent, an indication that the relationship between conflict and government expenditure is heterogeneous in nature across the continent. The causal effect of government expenditure is however most widespread for ethnic conflict.Öğe Does economic complexity influence environmental performance? Empirical evidence from OECD countries(John Wiley and Sons Ltd, 2022) Lee, Chien-Chiang; Olasehinde-Williams, GodwinEnvironmental degradation is a major challenge facing the world. Our view is that a country's productive structure, reflected through its knowledge content and technical capabilities (economic complexity), is strongly correlated with its environmental performance. To empirically confirm this view, the link between economic complexity and environmental performance in member countries of the Organization for Economic Co-operation and Development (OECD) was examined within a modified version of the Stochastic Impacts by Regression on Population, Affluence and Technology (STIRPAT) model incorporating two alternative measures of economic complexity. The model was estimated using the fixed effects extension proposed by Driscoll and Kraay (DK-FE) and Generalized Method of Moments (GMM) estimation techniques. Granger causality testing in frequency domain was also employed to examine country-specific relationships. The sample period extended from 2007 to 2016. The study findings provided reliable empirical justification for our position. The coefficients for economic complexity in the long-run estimations revealed that economic complexity positively impacted on environmental performance in the OECD countries. Granger causality outcomes also indicated economic complexity as a meaningful predictor of environmental performance in most of the OECD countries.Öğe Does geopolitics trigger energy inflation in the European economic area? Evidence from a panel time-varying regression(Emerald, 2023) Olasehinde-Williams, Godwin; Olanipekun, Ifedolapo; Usman, OjonugwaPurpose – This paper aims to examine the reaction of energy inflation to geopolitical risks in the European Economic Area between 1990 and 2015. Design/methodology/approach – This study applies the nonparametric time-varying coefficient panel data model with fixed effects. In addition, to further reveal potential tail effects that may not have been captured by conditional mean-based regressions, the method of moments quantile regression was also used. Findings – The findings of this study are as follows: first, as European countries get exposed to geopolitical tensions, it is expected that energy prices will surge. Second, the ability of geopolitical risk to trigger energy inflation in recent times is not as powerful as it used to be. Third, countries with a lower inflation rate, when exposed to geopolitical risks, experience smaller increases in energy inflation compared to countries with a higher inflation rate. Research limitations/implications – The findings of this study lead us to the conclusion that transitioning from nonrenewable to renewable energy use is one channel through which the sampled countries can battle the energy inflation, which geopolitical risks trigger. A sound macroeconomic policy for inflation control is a complementary channel through which the same goal can be achieved. Originality/value – Given the increasing level of energy inflation and geopolitical risks in the world today, this study is an attempt to reveal the time-varying characteristics of the relationship between these variables in European countries using a nonparametric time-varying coefficient panel data model and method of moments quantile regression with fixed effectsÖğe Dynamic risk connectedness of crude oil price and sustainable investment in the United States: evidence from DCC-GARCH(Springer, 2023) Olasehinde-Williams, Godwin; Özkan, Oktay; Akadiri, Seyi SaintSustainable investment is widely regarded as an important market-based approach to achieving inclusive green growth. To achieve the inclusive green growth objective, companies providing sustainable products must be proftable enough to attract private capital. Oil price changes can however afect the proftability of such companies. This study assesses volatility transmission between crude oil prices and sustainable investment in the USA. Using the dynamic conditional correlation generalized autoregressive conditional heteroskedasticity (DCC-GARCH) method, daily data from September 28, 2012, to October 19, 2022, is analyzed. There are several key fndings from this analysis. The risk connectedness of crude oil and sustainable investment is found to vary with time. Results further show that the risk connectedness increases in periods of important economic and geopolitical events. The greatest risk connectedness of crude oil and sustainable investment is observed during the outbreak of coronavirus disease (COVID-19). Moreover, the result shows that crude oil is the main risk transmitter, whereas, both the energy efciency and pollution mitigation indices (i.e., sustainable investment) are risk receivers, and crude oil is constantly dominating sustainable investment. The study fndings provide valuable insights for investors and policymakers alike.Öğe Effects of climate policy uncertainty on sustainable investment: A dynamic analysis for the U.S(Springer Science and Business Media Deutschland GmbH, 2023) Olasehinde-Williams, Godwin; Özkan, Oktay; Akadiri, Seyi SaintUncertainties surrounding climate change policies of the United States introduce some degree of risk into sustainable investment decisions in the country. This study is an attempt to provide a new perspective on the nature of this problem. Both the traditional and time-varying nonparametric quantile causality techniques are employed in investigating the effects of climate policy uncertainty on sustainable investment in the United States. Weekly time-series data from October 17, 2010, to August 28, 2022, is used for empirical analysis. Results from the traditional nonparametric quantile causality analysis reveal that climate policy uncertainty has a significant causal effect on both sustainable investment returns and volatility. The results also show that the impact on sustainable investment volatility is greater than the impact on sustainable investment returns. The time-varying nonparametric quantile causality analysis confirms that climate policy uncertainty in the United States affects both the returns and volatility of sustainable investment and that the impact is greater for volatility. It is recommended that governments and policymakers ensure that climate policy objectives are properly defined and adhered to, such that regulatory uncertainty would be limited and private sector participation in sustainable investment would be encouraged. İn addition, policies clearly designed to incentivize sustainable investment by integrating risk premiums into expected profits could be employed.Öğe Environmental policy stringency and carbon leakages: a case for carbon border adjustment mechanism in the European Union(Springer Science and Business Media B.V., 2024) Olasehinde-Williams, Godwin; Akadiri, Seyi SaintThis study examines the link between the strictness of environmental policies and carbon leakage in the European Union (EU). It utilizes an econometric model to analyse how carbon leakage is influenced by environmental policies and other factors. A comprehensive dataset spanning from 1995 to 2020 for 20 EU member nations is employed. This study is ground-breaking, as it is the first to comprehensively assess the effect of aggregated environmental policies on carbon leakages in the EU. This study employs a range of econometric techniques to ensure the reliability of its findings, including the continuously updated fully modified approach, bias-adjusted ordinary least squares method, and bootstrap panel causality testing. The findings confirm that stringent environmental policies cause greater carbon leakage by increasing the quantity of foreign carbon emissions embodied in EU’s domestic final demand. Specifically, carbon leakage increases within the range 0.051–0.111% as environmental policy stringency rises by 1%. This outcome confirms that direct carbon leakage occurs through the international trade channel as domestic carbon emissions reduction is continuously being offset by greater emissions abroad. Country-specific reactions captured through causality tests further reveal that the predictive powers between environmental policy stringency and carbon leakage is widespread among the sampled EU countries. Thus, our conclusion is that stringent environmental policies put the region at a disadvantage in the international markets. The main recommendation therefore is that ample justification exists for the introduction of carbon border adjustment mechanism, as the positives associated with its imposition are likely to outweigh the negatives.Öğe Environmental policy, green trade and sustainable development in Europe: New perspective on the Porter hypothesis(SAGE Publications Inc., 2023) Olasehinde-Williams, Godwin; Folorunsho, AjideThis study tests the validity of the Porter hypothesis through the examination of the joint effects of green trade and environmental policy stringency on sustainable development in the European Economic Area. To achieve the study objective, data for 14 countries within the region between 2003 and 2015 is analyzed using advanced panel estimation techniques – panel method of moments quantile and nonparametric time-varying coefficient panel models. The empirical analysis yields a number of interesting results. In confirmation of the Porter hypothesis, the interaction term is positive and significant. Specifically, a percentage increase in environmental policy stringency raises the positive impact of green trade on sustainable development by 0.005%. This interactive effect also ranges between 0.002% and 0.007% across quantiles. This indicates that the higher the level of sustainable development, the higher the moderating impact of environmental policy stringency on the relationship between green trade and sustainable development. This suggests that stringent policies are able to induce green technological shocks that cause efficiency improvements and innovation, which in turn promote sustainable development either directly or indirectly through their interactions with green trade. Moreover, the individual and synergistic impacts of environmental policy stringency and green trade are time-varying and sensitive to economic conditions. They become more pronounced in periods of major regional/global economic events. Responsible use of strict environmental policies is advocated, and the removal of green trade barriers is encouraged.Öğe External financing for ınclusive growth in lower - middle ıncome west african countries: foreign direct ınvestment versus official development assistance(Routledge, 2022) Afolabi Ibikunle, Joseph; Uzoechina, Benedict I.; Olasehinde-Williams, Godwin; Bekun, Festus VictorMost developing countries are plagued with harsh economic realities, which motivate them to seek sustainable economic growth and development in line with goal eight of the United Nations Sustainable Development Goals. To this end, this paper investigated the source of external financing that is most helpful for achieving inclusive growth in lower-middle-income West African countries. The study is a panel analysis of annual data extending from 2000 to 2019. The study employed the Emirmahmutoglu and Kose Bootstrap Granger Causality Test, Westerlund Cointegration Test, Common Correlated Mean Group estimation technique, and Augmented Mean Group estimation technique for econometric analyses. The long-run empirical results from the study showed that both foreign direct investment and foreign aid have positive and significant effects on inclusive growth, although the impact of foreign direct investment is greater than that of foreign aid. A bi-directional causality was also found to exist between inclusive growth and foreign direct investment, while no causal relationship was detected between inclusive growth and foreign aid. Given the study’s empirical outcomes, it is recommended that West African countries prioritize macroeconomic policy reforms that provide enabling conditions for foreign direct investment to thrive rather than pursue foreign aid that more often than not are misdirected.Öğe Geopolitical oil price uncertainty transmission into core inflation: Evidence from two of the biggest global players(Elsevier, 2023) Lee, Chien-Chiang; Olasehinde-Williams, Godwin; Özkan, OktayThis research argues that inflation indirectly correlates with geopolitics through the oil markets. The argument is that uncertainties generated by geopolitics are often transmitted into core inflation through oil prices, and we provide empirical evidence to support this by establishing an uncertainty-oil-macroeconomy nexus for the biggest oil importing countries, the U.S. and China. The study specifically examines whether there are indirect contributions of geopolitical oil price uncertainty to inflation that appear in core inflation, excluding the more volatile food and energy prices. It employs a non-parametric quantile causality technique for analyzing how geopolitical oil price uncertainty and core inflation interact in both countries and conducts rolling windows based non-parametric quantile causality analysis for robustness. The full-time non-parametric quantile causal ity results show that geopolitical oil price risk strongly affects core inflation both in mean and variance, espe cially in the mid-quantiles, and that its effect is greater in variance relative to mean for both countries. The rolling windows-based outcomes indicate that geopolitical oil price risk exerts an increasing influence on core inflation during important geopolitical events such as the Euro crisis, Brexit, presidential elections, trade wars, and COVID-19, and these impacts differ not only between countries, but also according to whether causality is mean or variance. Finally, the significance of the findings is discussed.Öğe Geopolitical oil price uncertainty transmission into core inflation: Evidence from two of the biggest global players (vol 126, 106983, 2023)(Elsevier, 2024) Lee, Chien-Chiang; Olasehinde-Williams, Godwin; Ozkan, Oktay[Abstract Not Available]Öğe Interest Rate Volatility and Economic Growth in Nigeria: New Insight from the Quantile Autoregressive Distributed Lag (QARDL) Model(Journal of the Knowledge Economy, 2024) Olasehinde-Williams, Godwin; Omotosho, Ruth; Bekun, Festus VictorThis is a study on interest rate volatility, a crucial form of volatility which affects local and foreign investments in the real and financial sectors. Whether to prioritize interest rate stability to prevent distortions in the market mechanism or to prioritize other macroeconomic objectives while allowing interest rates to independently react to market forces is a key question for Nigeria’s apex monetary authority. Answering this question is the primary motivation for this research. This paper is an attempt to establish the effect of interest rate volatility on economic growth and further conclude on the suitability of the financial liberalization policy in Nigeria. To reach an evidence-based conclusion, the paper analyzes the relationship between interest rate volatility and economic growth in Nigeria for the period 1981–2020. The QARDL procedure was employed to establish the short-run and long-run quantile-specific impacts of interest rate volatility. As a final step, Granger causality tests are conducted to investigate the predictive powers of the variables. It is discovered from the econometric analysis that interest rate volatility adversely affects the economic performance of Nigeria in both the short run and long run. Consequently, full liberalization is not suitable for the economy. Moreover, we find that the short-run adverse growth effect of interest rate volatility is greater when the economy is already in a relatively weak state, whereas the long-run adverse growth effect is greater when the economy is already in a relatively strong position. The findings sufficiently prove that full interest rate liberalization is not Pareto efficient for Nigeria. Hence, greater supervision of the interest rate corridor system to reduce volatility in the rates and minimize chances of persistent upward or downward bias is advised. Study limitations and directions for further research are also provided.Öğe The investment volatility-dampening role of foreign aid in poor sub-Saharan African countries(Routledge, 2022) Balcilar, Mehmet; Olasehinde-Williams, Godwin; Tokar, BerkanSustained investment is required for economic growth. Investment however often experiences severe volatility in poor countries, making spending plans difficult to formulate, and diminishing growth potentials. Foreign aid serves as an important source of complementary financing for sustained investment. This paper thus studies the effect of aid inflows on total investment volatility in 19 heavily indebted poor subSaharan African countries over the period 1980–2018. Employing the cross-sectionally augmented distributed lag (CS-DL) estimation technique for long-run coefficients in dynamic heterogeneous panels with cross-sectional dependence along with bootstrap panel causality testing, we show that aid has an inverse relationship with investment volatility. We thus conclude that aid can be viewed as a dampening factor for investment volatility in poor countries. We also show that the ability of sudden reductions in aid inflows to trigger investment volatility is bigger than the ability of sudden increases in aid inflows to lower investment volatility.Öğe Is geopolitical oil price uncertainty forcing the world to use energy more efficiently? Evidence from advanced statistical methods(Elsevier B.V., 2024) Lee, Chien-Chiang; Olasehinde-Williams, Godwin; Özkan, OktayThis paper argues that energy efficiency is a potent shield against oil price uncertainty in an increasingly interconnected world fraught with geopolitical tensions. By reducing dependence on oil, enhancing economic resilience, and improving energy security, energy efficiency measures offer multifaceted benefits for both national economies and global stability. Specifically, a wavelet coherence analysis is conducted to study the response of global energy efficiency to geopolitical oil price uncertainty. Quantile-on-quantile and quantile regressions are additionally employed to separate the impacts of various geopolitical oil price risk quantiles on the quantiles of energy efficiency. These methods are utilized in the examination of global time-series data covering the timeframe 2004:Q1–2020:Q4. The wavelet coherence outcomes indicate a positive correlation between geopolitical oil price uncertainty and energy efficiency, particularly during the energy crisis of the 2000s and the COVID-19 pandemic. The results also reveal that geopolitical oil price uncertainty leads to energy efficiency, indicating that an upsurge in geopolitical oil price uncertainty causes energy efficiency to increase. Moreover, the results from quantile-on-quantile and quantile regressions affirm the predominantly positive effects of geopolitical oil price uncertainty on global energy efficiency. Our conclusion therefore is that through strategic investments, innovative policies, and international collaborations relating to energy efficiency, nations can fortify themselves against the destabilizing effects of geopolitical conflicts on energy markets. This would ensure a more sustainable and secure energy future for all.Öğe Is interest rate uncertainty a predictor of investment volatility? evidence from the wild bootstrap likelihood ratio approach(Springer, 2022) Olasehinde-Williams, Godwin; Özkan, OktayThis paper investigates the ability of interest rate uncertainty to predict investment volatility in nine selected countries. Employing a novel wild bootstrap likelihood ratio approach, the study shows interest rate uncertainty to be a signifcant predictor of investment volatility in all but one of the sampled countries. Overall, we fnd that interest rate uncertainty aggravates investment volatility in the United States, Germany, France, Italy, Spain, United Kingdom, Japan and Sweden. The results remain the same irrespective of whether a 3-month forecast horizon or a 12-month forecast horizon is used. The implication of the study fnding is that the current value of investments more often than not fuctuates in response to uncertain interest rate changes. This suggests that the investment rate is not only dependent on the interest rate level, but on the degree of uncertainty in interest rate movements as well. Interest rate uncertainty is thus an important factor to be considered in investment analysis. This study thus encourages central banks to pay signifcant attention to interest rate stability due to its ability to minimize the distortions in the market mechanism for raising long-term capital.Öğe Is renewable energy use lowering resource-related uncertainties?(Elsevier, 2023) Olanipekun, Ifedolapo Olabisi; Ozkan, Oktay; Olasehinde-Williams, GodwinInvestment in renewable energy is vital, not just for the climate, but also for energy security. However, most studies on renewable energy focus on its drivers; there is still limited knowledge about how it affects resource related uncertainties. This study is a global analysis of the renewable energy-geopolitical oil price uncertainty nexus. Wavelet coherence analysis, quantile-on-quantile regression and quantile regression are carried out using global time-series data spanning 2004Q1 to 2019Q4. The outcomes show a significant negative relationship between renewable energy use and geopolitical oil price uncertainty in the short and medium term from 2008 to 2010 and in the short to long term from 2012 to 2019. It also reveals that the expansion of renewable energy use minimizes geopolitical oil price uncertainty. The inferences drawn affirm that renewable energy is a means of lowering oil dependence and consequently hedging against global oil price uncertainties induced by geopolitical events. The findings provide an additional rationale, asides the associated environmental benefits, for consid ering renewable energy as an indispensable part of sustainable energy strategy. Thus, it is recommended that international energy institutions’ energy transition efforts should be complemented by increased sponsorship of renewable energy development by other international organizations across the globe.
