Synergistic Dynamics: The Interplay Between Clean Power, Artificial Intelligence, and Global Assets Across Economic Quantiles

Seyi Saint Akadiri and Oktay Özkan

Politická ekonomie, vol. preprint

Abstract: This study examines nonlinear, quantile-dependent spillovers among clean power, artificial intelligence (AI), and global financial assets using the quantile-on-quantile VAR connectedness framework with generalised forecast-error generalised variance decomposition. Using daily data from June 1, 2018, to October 18, 2024, the analysis covers clean power, AI, commodities, equities, cryptocurrencies, green bonds, ESG, and alternative investment indices. The results reveal strong state-dependent interconnectedness. The total connectedness index (TCI) is lowest around the median quantiles (0.50-0.50), averaging 63-65, but rises sharply in extreme conditions, exceeding 95 at both lower (0.05-0.05) and upper (0.95-0.95) quantiles. Net connectedness estimates show that gold and green bonds are persistent net receivers of shocks, particularly in downside markets, confirming their safe-haven roles. Equities and cryptocurrencies serve as dominant net transmitters in the upper quantiles (0.75-0.95), amplifying systemic risk. Clean power and ESG assets exhibit increasing bidirectional spillovers, indicating deeper financial integration. Rolling-window results show that spillovers intensify during pandemic, geopolitical, and monetary-tightening episodes, with clear implications for tail-risk management and sustainable portfolio design.

Keywords: Financial interconnectedness; spillover effects; systemic risk; clean energy investments (search for similar items in EconPapers)
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DOI: 10.18267/j.polek.1561

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