Economic policy uncertainty, coal price, and industrial output: Evidence from China

Boqiang Lin () and Zhijun Wang

Energy, 2025, vol. 332, issue C

Abstract: Coal is the primary energy in China, and coal price volatility exerts profound implications for Chinese energy security and economic development. This study uses monthly data from January 2011 to December 2023 and employs a Time-Varying Parameter Vector Autoregression with Stochastic Volatility (TVP-VAR-SV) model to explore the dynamic effects of economic policy uncertainty (EPU) on coal price (CP) and industrial output (IO). Additionally, it encompasses a comparative assessment of the differences between oil price (OP) versus CP and distinguishes the varying impacts of different types of EPU. The findings include: (1) EPU raises CP while suppressing IO, with these effects evolving over time. (2) EPU has a lesser impact on CP than on OP. In the medium to long term, the effects of OP and CP fluctuations on IO are opposite, with OP fluctuations having a negative impact on industrial output. (3) Among various types of EPU, trade policy uncertainty significantly impacts CP, while monetary policy uncertainty predominantly shapes IO. Drawing from these insights, this paper proposes targeted policy recommendations aimed at helping decision-makers stabilize CP and ensure the stability of industrial production in the face of EPU.

Keywords: Economic policy uncertainty; Coal price; Industrial output; TVP-VAR model (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0360544225028403
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:332:y:2025:i:c:s0360544225028403

DOI: 10.1016/j.energy.2025.137198

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 ().