Time-varying Relationship between Fossil Fuel-Free Energy Indices and Economic Uncertainty: Global Evidence from Wavelet Coherence Approach

Farah Durani
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Farah Durani: University of Business and Technology, Jeddah, Saudi Arabia.

International Journal of Energy Economics and Policy, 2024, vol. 14, issue 1, 663-672

Abstract: Considering the abysmal environmental impacts of anthropogenic activities, the entire world has been striving to shift toward a green economy. Also, the transition to a greener economy entails green financing, which escalates the pace and performance of environment-friendly economic activities. However, uncertain economic conditions might be a hindrance to green financing. Based on this, I investigate the co-movement of fossil-fuel-free energy equity indices returns and Twitter-based economic uncertainty using a wavelet coherence approach. The findings document that global, the US, and Japanese fossil-fuel-free indices show strong and positive co-movement with Twitter economic uncertainty for short- and medium-term investment horizons. However, a weak positive co-movement is observed during the Russia-Ukraine war. Based on these interesting findings, I suggest many policy implications.

Keywords: Renewable energy investment; Energy markets; Twitter-based economic uncertainty; Fossil fuel-free energy equity; Russia-Ukraine war; COVID-19 (search for similar items in EconPapers)
JEL-codes: D53 F37 G11 G15 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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