Climate change and Japanese economic policy uncertainty: Asymmetric analysis

Jiaming Zhang, Yang Zou, Yitian Xiang and Songlin Guo

Finance Research Letters, 2023, vol. 56, issue C

Abstract: Japan has always formulated various corresponding policies in response to climate change. This paper explores the asymmetric impact of climate change on Japan's economic policy uncertainty (JEPU) by comparing text-based indicators (climate policy uncertainty, CPU) and physical indicators (El Niño Southern Oscillation, ENSO). The asymmetric Granger test finds that CPU has no significant impact on JEPU. However, positive ENSO shocks can lead to an increase in JEPU. Different ENSO shocks may differently drive JEPU in all runs. Thus, this kind of text-based indicator may not be appropriate when exploring the impact of climate change on Japanese economic policy.

Keywords: Climate policy uncertainty; El Niño-southern oscillation; Japanese economic policy uncertainty; Asymmetric Granger-causality (search for similar items in EconPapers)
JEL-codes: C22 C53 G11 G12 Q43 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:56:y:2023:i:c:s1544612323005378

DOI: 10.1016/j.frl.2023.104165

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