An empirical study on the response of the energy market to the shock from the artificial intelligence industry

Min Liu, Hong-Fei Liu and Chien-Chiang Lee ()

Energy, 2024, vol. 288, issue C

Abstract: This paper makes the first attempt to look at the response of the energy market to the shock from the AI industry and the role of AI in the energy market risk spillover network. The innovation of the paper lies in adopting a quantile-based and time-varying framework in the empirical analysis. This enables us to reveal the cross-quantile and lead-lag correlations between AI and the energy market. We find that an extreme negative shock from AI tends to correspond to an extreme downward movement in crude oil, gasoline, gas oil, and clean energy markets and the shock response dissipates after 66 days. Meanwhile, the cross-quantile correlations are subject to structural changes once the extreme events arrive. As for the total spillover effect of the energy market, it increases by 5.34 % after AI is considered as a source of uncertainty in the risk spillover network dominated by the crude oil market. Thus, the shock from AI challenges the stability of the energy market. A close relationship between the AI industry and the clean energy market is also identified. We contribute to studying the relationship between the AI industry and the energy market from the perspective of the risk connectedness between the two fields.

Keywords: Artificial intelligence; Energy market; Extreme shocks; Cross-quantilogram (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0360544223030499
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:288:y:2024:i:c:s0360544223030499

DOI: 10.1016/j.energy.2023.129655

Access Statistics for this article

Energy is currently edited by Henrik Lund and Mark J. Kaiser

More articles in Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().