Does sectoral energy consumption depend on trade, monetary, and fiscal policy uncertainty? Policy recommendations using novel bootstrap ARDL approach.

Roni Bhowmik, Farah Durani, Muddassar Sarfraz, Qasim Raza Syed, Ghadah Nasseif

Environmental science and pollution research international 2023 Jan

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Since the inception of the twenty-first century, there has been a profound upsurge in economic policy uncertainty (EPU) with several economic and environmental impacts. Although there exists a growing body of literature that probes the economic effects of EPU, the EPU-energy nexus yet remains understudied. To fill this gap, the current study probes the impact of disaggregated EPU (i.e., monetary, fiscal, and trade policy uncertainty) on energy consumption (EC) in the USA covering the period 1990M1-2020M12. In particular, we use sectoral EC (i.e., energy consumed by the residential sector, the industrial sector, the transport sector, the electric power sector, and the commercial sector) in consort with total EC. The findings from the bootstrap ARDL approach document that monetary policy uncertainty (MP) plunges EC, whereas trade (TP) and fiscal policy uncertainty (FP) escalate EC in the long run. On the contrary, there is a heterogeneous impact of FP and MP across sectors in the short run, while TP does not affect EC. Keeping in view the findings, we propose policy recommendations to achieve numerous Sustainable Development Goals. © 2022. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.

Citation

Roni Bhowmik, Farah Durani, Muddassar Sarfraz, Qasim Raza Syed, Ghadah Nasseif. Does sectoral energy consumption depend on trade, monetary, and fiscal policy uncertainty? Policy recommendations using novel bootstrap ARDL approach. Environmental science and pollution research international. 2023 Jan;30(5):12916-12928