 How financial markets respond to climate policy uncertainty: A dynamic resilience analysisXiaoyang Yao, Sairidaer Maimaitijiang, Jianfeng Li and Wei Le Journal of Commodity Markets, 2025, vol. 39, issue C Abstract: In the context of the global transition to a sustainable development, focusing on the impact of climate policy uncertainty (CPU) on financial markets is important to prevent green swan events. This paper analyzes the resilience of major stock and commodities markets to CPU shocks from the perspectives of absorption intensity and duration, which imply the ability to withdraw the shocks and recover from them, respectively. Based on these two aspects, we construct a resilience index and explore the impacts of macroeconomic conditions on resilience. We find that most markets exhibit negative responses to CPU shocks, except for natural gas and precious metals. Most markets’ resilience to CPU has intensified, whereas, traditional energy sectors and the agricultural commodities market still shown the most vulnerability to CPU shocks. Compared to negative causality, the macro-economic conditions show higher level of positive causality to resilience. An increase in macro-economic uncertainty can exacerbate the deterioration of market resilience. Keywords: Climate policy uncertainty; Resilience; Stock market; Commodity market; TVP-VAR-SV model (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:jocoma:v:39:y:2025:i:c:s2405851325000340 DOI: 10.1016/j.jcomm.2025.100490 Access Statistics for this article Journal of Commodity Markets is currently edited by Marcel Prokopczuk, Betty Simkins and Sjur Westgaard More articles in Journal of Commodity Markets from Elsevier |
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