Financial conditions and Sino-US tensions: A Granger causality analysis of diverging financial condition indicators

Yifei Cai, Yijuan Shen and Gazi Salah Uddin

Finance Research Letters, 2025, vol. 79, issue C

Abstract: The study reveals that US financial conditions consistently Granger-cause variations in Sino-US political tensions, with the reverse causality observed only when using the Chicago Fed’s National Financial Conditions Index, while no such impact is found with the newly introduced US - Fed Financial Conditions Impulse on Growth Index, highlighting the importance of using diverse financial indicators to assess the impact of political tensions.

Keywords: Sino-US political relations; US financial conditions; Granger causality at quantiles (search for similar items in EconPapers)
JEL-codes: C32 E44 F51 H77 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:79:y:2025:i:c:s1544612325004623

DOI: 10.1016/j.frl.2025.107199

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