Transition to Renewable Energy Production in the United States: The Role of Monetary, Fiscal, and Trade Policy Uncertainty

Muhammad Jamil, Farhan Ahmed, Gouranga Chandra Debnath and Štefan Bojnec
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Muhammad Jamil: Ghulam Ishaq Khan Memorial Chair (SBP), Kashmir Institute of Economics, The University of Azad & Jammu Kashmir, Muzaffarabad 13100, Pakistan
Farhan Ahmed: Department of Economics & Management Sciences, NED University of Engineering & Technology, Karachi 75270, Pakistan
Gouranga Chandra Debnath: School of Business & Economics, United International University, Dhaka 1212, Bangladesh
Štefan Bojnec: Faculty of Management, University of Primorska, SI-6101 Koper-Capodistria, Slovenia

Energies, 2022, vol. 15, issue 13, 1-15

Abstract: Renewable energy has emerged as a key to attain higher economic growth without any detrimental impact on the environment. Therefore, the entire world is in the transition phase from non-renewables to renewables. To improve the levels of production of renewable energy, it is inevitable to discern its determinants. Hence, this study aims to probe the impact of monetary, fiscal, and trade policy uncertainty on renewable energy production in the United States. To this end, the novel smooth and sharp structural breaks unit root test is used to scrutinize the order of integration. Next, we also apply the novel augmented autoregressive distributed lag methodology for discerning cointegration. The findings note that, in the long- and short-run, monetary policy uncertainty plunges the production of renewable energy, whereas fiscal policy uncertainty upsurges it. Further, trade policy uncertainty does not affect renewable energy production. Based on these results, we propose policy suggestions that could expedite the transition to renewables.

Keywords: global environment awareness; renewable energy transition; renewable energy production; sustainability; economic policy; unit root test; autoregressive distributed lag model (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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