 Does the price of strategic commodities respond to U.S. partisan conflict?Yong Jiang, Yi-Shuai Ren, Chao-Qun Ma, Jiang-Long Liu and Basil Sharp Resources Policy, 2020, vol. 66, issue C Abstract: A noteworthy feature of U.S. politics in recent years is serious partisan conflict, which has led to intensifying polarization and exacerbating high policy uncertainty. The US is a significant player in oil and gold markets. Oil and gold also form the basis of important strategic reserves in the US. We investigate whether U.S. partisan conflict affects the returns and price volatility of oil and gold using a parametric test of Granger causality in quantiles. The empirical results suggest that U.S. partisan conflict has an effect on the returns of oil and gold, and the effects are concentrated at the tail of the conditional distribution of returns. More specifically, the partisan conflict mainly affects oil returns when the crude oil market is in a bearish state (lower quantiles). By contrast, partisan conflict matters for gold returns only when the gold market is in a bullish scenario (higher quantiles). In addition, for the volatility of oil and gold, the predictability of partisan conflict index virtually covers the entire distribution of volatility. Keywords: U.S. partisan conflict; Granger causality in quantiles; Oil prices; Gold prices (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:66:y:2020:i:c:s0301420719307299 DOI: 10.1016/j.resourpol.2020.101617 Access Statistics for this article Resources Policy is currently edited by R. G. Eggert More articles in Resources Policy from Elsevier |
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