Economic uncertainty: a worldwide concern, a causal and cointegrating analysis among high uncertainty countries

Supipi Hansika, Priyan Navamohan, Dinuli Gamage, Ridmi Madurawala and Ruwan Jayathilaka ()
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Supipi Hansika: Sri Lanka Institute of Information Technology
Priyan Navamohan: Sri Lanka Institute of Information Technology
Dinuli Gamage: Sri Lanka Institute of Information Technology
Ridmi Madurawala: Sri Lanka Institute of Information Technology
Ruwan Jayathilaka: Sri Lanka Institute of Information Technology

Palgrave Communications, 2025, vol. 12, issue 1, 1-19

Abstract: Abstract In the modern world, exploring economic uncertainty and the unpredictability in economic conditions is crucial to determine its impact on day-to-day society. However, existing literature has examined this relationship in a generalised manner, often without focusing on the bi-directional effects among these variables. This study explores the causal and cointegrating interrelationships among economic uncertainty and suicide rates, unemployment rates, economic growth, and trade openness across 30 high uncertainty countries utilising Granger causality test and Cointegration test. Unlike existing studies, which focus on a certain country or region, the current findings disclose bi-directional causation between the measured variables, particularly in Kenya, Finland, Portugal, Latvia, Peru, Haiti, Mexico, Kazakhstan and Kyrgyz Republic. The cointegration tests show that while uncertainty reduces economic growth and trade openness in the long run, in line with contemporary literature, uncertainty also reduces suicide rates and unemployment rates in the long term. By analysing the countries with the highest economic uncertainty, this study aims to provide country-specific policies in line with Sustainable Development Goals (SDGs) developed by United Nations (UN) to navigate the bi-directional effects among economic uncertainty and the linked variables.

Date: 2025
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DOI: 10.1057/s41599-025-05762-3

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