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Whose Policy Uncertainty Matters in the Trade between Germany and the United States: An Asymmetric Analysis

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  2. Economics, Finance, Business & Management
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  4. Vol. 67, Issue 4
  5. pp. 287–309

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Bahmani-Oskooee, M., Nouira, R., Saafi, S. Whose Policy Uncertainty Matters in the Trade between Germany and the United States: An Asymmetric Analysis. Applied Economics Quarterly, 67(4), 287-309. https://doi.org/10.3790/aeq.67.4.287
Bahmani-Oskooee, Mohsen; Nouira, Ridha and Saafi, Sami "Whose Policy Uncertainty Matters in the Trade between Germany and the United States: An Asymmetric Analysis" Applied Economics Quarterly 67.4, 2021, 287-309. https://doi.org/10.3790/aeq.67.4.287
Bahmani-Oskooee, Mohsen/Nouira, Ridha/Saafi, Sami (2021): Whose Policy Uncertainty Matters in the Trade between Germany and the United States: An Asymmetric Analysis, in: Applied Economics Quarterly, vol. 67, iss. 4, 287-309, [online] https://doi.org/10.3790/aeq.67.4.287
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Whose Policy Uncertainty Matters in the Trade between Germany and the United States: An Asymmetric Analysis

Bahmani-Oskooee, Mohsen | Nouira, Ridha | Saafi, Sami

Applied Economics Quarterly, Vol. 67 (2021), Iss. 4 : pp. 287–309

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Article Details

Publisher Name
Duncker & Humblot
DOI
https://doi.org/10.3790/aeq.67.4.287
Language
English
Pages
23
Keywords

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Author Details

Mohsen Bahmani-Oskooee, Corresponding author. The Center for Research on International Economics and Department of Economics, The University of Wisconsin-Milwaukee, Milwaukee, WI 53201.

Ridha Nouira, LAMIDED and ISFF, University of Sousse, Tunisia.

Sami Saafi, LAMIDED, University of Sousse, and FSEG Mahdia, Monastir University, Tunisia.

References

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  2. Al-Shayeb, A./Hatemi-J., A. (2016): “Trade Openness and Economic Development in the UAE: An Asymmetric Approach”, Journal of Economic Studies 43, 587–597.  Google Scholar
  3. Al-Thaqeb, S. A./Algharabali, B. G. (2019): “Economic Policy Uncertainty: A Literature Review”, Journal of Economic Asymmetries 20, e00133, 1–11.  Google Scholar
  4. Arize, A. C./Malindretos, J./Igwe, E.U. (2017): “Do Exchange Rate Changes Improve the Trade Balance: An Asymmetric Nonlinear Cointegration Approach”, International Review of Economics and Finance 49, 313–326.  Google Scholar
  5. Armelius, H./Belfrage, C. J./Stenbacka, H. (2014): “The Mystery of the Missing World Trade Growth after the Global Financial Crisis.”, Sveriges Riksbank Economic Review 3, 7–22.  Google Scholar
  6. Baek, J. (2020): “An Asymmetric Approach to the Oil Prices-Trade Balance Nexus: New Evidence from Bilateral Trade between Korea and her 14 Trading Partners”, Economic Analysis and Policy 68, 199–209.  Google Scholar
  7. Baghestani, H./Kherfi, S. (2015): “An Error-Correction Modeling of US Consumer Spending: Are there Asymmetries?”, Journal of Economic Studies 42, 1078–1094.  Google Scholar
  8. Bahmani-Oskooee, M. (1986): “Determinants of International Trade Flows: The Case of Developing Countries,” Journal of Development Economics 20, 107–123.  Google Scholar
  9. Bahmani-Oskooee, M./Ghodsi, H. (2017): “Policy Uncertainty and House Prices in the United States of America”, Journal of Real Estate Portfolio Management 23, 73–85.  Google Scholar
  10. Bahmani-Oskooee, M./Ghodsi, H. (2018): “Asymmetric Causality between the U.S. Housing Market and its Stock Market: Evidence from State Level Data”, Journal of Economic Asymmetries 18, Article e00095, 1–8.  Google Scholar
  11. Bahmani-Oskooee, M./Harvey, H. (2022): “The U.S.-Canadian Trade and Exchange Rate Uncertainty: Asymmetric Evidence from 104 Industries”, The World Economy 45, 841–866.  Google Scholar
  12. Bahmani-Oskooee, M./Harvey, H./Niroomand, F. (2018a): “On the Impact of Policy Uncertainty on Oil Prices: An Asymmetry Analysis“, International Journal of Financial Studies 6(12), 1–11.  Google Scholar
  13. Bahmani-Oskooee, M./Kutan, A./Kones, A. (2016), “Policy Uncertainty and the Demand for Money in the United States”, Applied Economics Quarterly 62, 37–49.  Google Scholar
  14. Bahmani-Oskooee, M./Maki-Nayeri, M. (2019): “Asymmetric Effects of Policy Uncertainty on Domestic Investment in G7 Countries”, Open Economies Review 30, 675–693.  Google Scholar
  15. Bahmani-Oskooee, M./Maki-Nayeri, M. (2020): “Policy Uncertainty and Consumption in G7 Countries: An Asymmetry Analysis”, International Economics 163, 101–113.  Google Scholar
  16. Bahmani-Oskooee, M./Xu, J. (2022): “Whose Policy Uncertainty Matters in the Trade between China and the U.S.?”, Economic Change and Restructuring 55, 1497–1542.  Google Scholar
  17. Baker, S. R./Bloom, N./Davis, S. J. (2016): “Measuring Economic Policy Uncertainty”, Quarterly Journal of Economics 131, 1593–1636.  Google Scholar
  18. Brogaard, J./Detzel, A. (2015): “The Asset-Pricing Implications of Government Economic Policy Uncertainty”, Management Science 61, 3–18.  Google Scholar
  19. Durmaz, N. (2015): “Industry Level J-Curve in Turkey,” Journal of Economic Studies 42, 689–706.  Google Scholar
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  21. Gogas, P./Pragidis, I. (2015): “Are there Asymmetries in Fiscal Policy Shocks?”, Journal of Economic Studies 42, 303–321.  Google Scholar
  22. Hajilee, M./Niroomand, F. (2019): “On the Link between Financial Market Inclusion and Trade Openness: An Asymmetric Analysis”, Economic Analysis and Policy 62, 373–381.  Google Scholar
  23. Hajilee, M./Niroomand, F. (2021): “Is there an Asymmetric Link between the Shadow Economy and the Financial Depth of Emerging Market Economies?“, Journal of Economic Asymmetries 23, Article e00192.  Google Scholar
  24. Halicioglu, F. (2007): “The J-Curve Dynamics of Turkish Bilateral Trade: A Cointegration Approach,” Journal of Economic Studies 34, 103–119.  Google Scholar
  25. Han, L./Qi, M./Yin, L. (2016): “Macroeconomic Policy Uncertainty Shocks on the Chinese Economy: A GVAR Analysis.” Applied Economics 48, 4907–4921.  Google Scholar
  26. Istiak, K./Alam, M. R. (2019): “Oil Prices, Policy Uncertainty and Asymmetries in Inflation Expectations“, Journal of Economic Studies 46, 324–334.  Google Scholar
  27. Jurado, K./Ludvigson, S. C./Ng, S. (2015): “Measuring Uncertainty”, American Economic Review 105, 1177–1216.  Google Scholar
  28. Kang, W./Ratti, R. (2013): “Oil Shocks, Policy Uncertainty and Stock Market Return”, International Financial Markets, Institutions, and Money 26, 305–318.  Google Scholar
  29. Ko, J.-H./Lee, C.-M. (2015): “International Economic Policy Uncertainty and Stock Prices: Wavelet Approach”, Economics Letters 134, 118–122.  Google Scholar
  30. Lima, L./Foffano Vasconcelos, C./Simão, J./de Mendonça, H. (2016): “The Quantitative Easing Effect on the Stock Market of the USA, the UK and Japan: An ARDL Approach for the Crisis Period”, Journal of Economic Studies 43, 1006–1021.  Google Scholar
  31. Nusair, S. A. (2017): “The J-curve Phenomenon in European Transition Economies: A Nonliear ARDL Approach”, International Review of Applied Economics 31, 1–27.  Google Scholar
  32. Pastor, L./Veronesi, P. (2013): “Policy Uncertainty and Risk Premia”, Journal of Financial Economics 110, 520–545.  Google Scholar
  33. Pesaran, M. H./Shin, Y./Smith, R. J. (2001): “Bounds Testing Approaches to the Analysis of Level Relationships,” Journal of Applied Econometrics 16, 289–326.  Google Scholar
  34. Shin, Y./Yu, B. C./Greenwood-Nimmo, M. (2014): “Modelling Asymmetric Cointegration and Dynamic Multipliers in a Nonlinear ARDL Framework” Festschrift in Honor of Peter Schmidt: Econometric Methods and Applications, eds. R. Sickels and W. Horrace: Springer, New York, 281–314.  Google Scholar
  35. Tam, P. S. (2018): “Global Trade Flows and Economic Policy Uncertainty”, Applied Economics 50, 3718–3734.  Google Scholar
  36. Wang, Y./Chen, C. R./Huang, Y. S. (2014): “Economic Policy Uncertainty and Corporate Investment: Evidence from China”, Pacific-Basin Finance Journal 26, 227–243.  Google Scholar
  37. Aftab, M./Syed, K. B. S./Katper, N. A. (2017): “Exchange-Rate volatility and Malaysian-Thai Bilateral Industry Trade Flows”, Journal of Economic Studies 44, 99–114.  Google Scholar
  38. Al-Shayeb, A./Hatemi-J., A. (2016): “Trade Openness and Economic Development in the UAE: An Asymmetric Approach”, Journal of Economic Studies 43, 587–597.  Google Scholar
  39. Al-Thaqeb, S. A./Algharabali, B. G. (2019): “Economic Policy Uncertainty: A Literature Review”, Journal of Economic Asymmetries 20, e00133, 1–11.  Google Scholar
  40. Arize, A. C./Malindretos, J./Igwe, E.U. (2017): “Do Exchange Rate Changes Improve the Trade Balance: An Asymmetric Nonlinear Cointegration Approach”, International Review of Economics and Finance 49, 313–326.  Google Scholar
  41. Armelius, H./Belfrage, C. J./Stenbacka, H. (2014): “The Mystery of the Missing World Trade Growth after the Global Financial Crisis.”, Sveriges Riksbank Economic Review 3, 7–22.  Google Scholar
  42. Baek, J. (2020): “An Asymmetric Approach to the Oil Prices-Trade Balance Nexus: New Evidence from Bilateral Trade between Korea and her 14 Trading Partners”, Economic Analysis and Policy 68, 199–209.  Google Scholar
  43. Baghestani, H./Kherfi, S. (2015): “An Error-Correction Modeling of US Consumer Spending: Are there Asymmetries?”, Journal of Economic Studies 42, 1078–1094.  Google Scholar
  44. Bahmani-Oskooee, M. (1986): “Determinants of International Trade Flows: The Case of Developing Countries,” Journal of Development Economics 20, 107–123.  Google Scholar
  45. Bahmani-Oskooee, M./Ghodsi, H. (2017): “Policy Uncertainty and House Prices in the United States of America”, Journal of Real Estate Portfolio Management 23, 73–85.  Google Scholar
  46. Bahmani-Oskooee, M./Ghodsi, H. (2018): “Asymmetric Causality between the U.S. Housing Market and its Stock Market: Evidence from State Level Data”, Journal of Economic Asymmetries 18, Article e00095, 1–8.  Google Scholar
  47. Bahmani-Oskooee, M./Harvey, H. (2022): “The U.S.-Canadian Trade and Exchange Rate Uncertainty: Asymmetric Evidence from 104 Industries”, The World Economy 45, 841–866.  Google Scholar
  48. Bahmani-Oskooee, M./Harvey, H./Niroomand, F. (2018a): “On the Impact of Policy Uncertainty on Oil Prices: An Asymmetry Analysis“, International Journal of Financial Studies 6(12), 1–11.  Google Scholar
  49. Bahmani-Oskooee, M./Kutan, A./Kones, A. (2016), “Policy Uncertainty and the Demand for Money in the United States”, Applied Economics Quarterly 62, 37–49.  Google Scholar
  50. Bahmani-Oskooee, M./Maki-Nayeri, M. (2019): “Asymmetric Effects of Policy Uncertainty on Domestic Investment in G7 Countries”, Open Economies Review 30, 675–693.  Google Scholar
  51. Bahmani-Oskooee, M./Maki-Nayeri, M. (2020): “Policy Uncertainty and Consumption in G7 Countries: An Asymmetry Analysis”, International Economics 163, 101–113.  Google Scholar
  52. Bahmani-Oskooee, M./Xu, J. (2022): “Whose Policy Uncertainty Matters in the Trade between China and the U.S.?”, Economic Change and Restructuring 55, 1497–1542.  Google Scholar
  53. Baker, S. R./Bloom, N./Davis, S. J. (2016): “Measuring Economic Policy Uncertainty”, Quarterly Journal of Economics 131, 1593–1636.  Google Scholar
  54. Brogaard, J./Detzel, A. (2015): “The Asset-Pricing Implications of Government Economic Policy Uncertainty”, Management Science 61, 3–18.  Google Scholar
  55. Durmaz, N. (2015): “Industry Level J-Curve in Turkey,” Journal of Economic Studies 42, 689–706.  Google Scholar
  56. Engle, R. F./Granger, C. W. J. (1987): “Cointegration and Error Correction: Representation, Estimation, and Testing,” Econometrica 55, 251–76.  Google Scholar
  57. Gogas, P./Pragidis, I. (2015): “Are there Asymmetries in Fiscal Policy Shocks?”, Journal of Economic Studies 42, 303–321.  Google Scholar
  58. Hajilee, M./Niroomand, F. (2019): “On the Link between Financial Market Inclusion and Trade Openness: An Asymmetric Analysis”, Economic Analysis and Policy 62, 373–381.  Google Scholar
  59. Hajilee, M./Niroomand, F. (2021): “Is there an Asymmetric Link between the Shadow Economy and the Financial Depth of Emerging Market Economies?“, Journal of Economic Asymmetries 23, Article e00192.  Google Scholar
  60. Halicioglu, F. (2007): “The J-Curve Dynamics of Turkish Bilateral Trade: A Cointegration Approach,” Journal of Economic Studies 34, 103–119.  Google Scholar
  61. Han, L./Qi, M./Yin, L. (2016): “Macroeconomic Policy Uncertainty Shocks on the Chinese Economy: A GVAR Analysis.” Applied Economics 48, 4907–4921.  Google Scholar
  62. Istiak, K./Alam, M. R. (2019): “Oil Prices, Policy Uncertainty and Asymmetries in Inflation Expectations“, Journal of Economic Studies 46, 324–334.  Google Scholar
  63. Jurado, K./Ludvigson, S. C./Ng, S. (2015): “Measuring Uncertainty”, American Economic Review 105, 1177–1216.  Google Scholar
  64. Kang, W./Ratti, R. (2013): “Oil Shocks, Policy Uncertainty and Stock Market Return”, International Financial Markets, Institutions, and Money 26, 305–318.  Google Scholar
  65. Ko, J.-H./Lee, C.-M. (2015): “International Economic Policy Uncertainty and Stock Prices: Wavelet Approach”, Economics Letters 134, 118–122.  Google Scholar
  66. Lima, L./Foffano Vasconcelos, C./Simão, J./de Mendonça, H. (2016): “The Quantitative Easing Effect on the Stock Market of the USA, the UK and Japan: An ARDL Approach for the Crisis Period”, Journal of Economic Studies 43, 1006–1021.  Google Scholar
  67. Nusair, S. A. (2017): “The J-curve Phenomenon in European Transition Economies: A Nonliear ARDL Approach”, International Review of Applied Economics 31, 1–27.  Google Scholar
  68. Pastor, L./Veronesi, P. (2013): “Policy Uncertainty and Risk Premia”, Journal of Financial Economics 110, 520–545.  Google Scholar
  69. Pesaran, M. H./Shin, Y./Smith, R. J. (2001): “Bounds Testing Approaches to the Analysis of Level Relationships,” Journal of Applied Econometrics 16, 289–326.  Google Scholar
  70. Shin, Y./Yu, B. C./Greenwood-Nimmo, M. (2014): “Modelling Asymmetric Cointegration and Dynamic Multipliers in a Nonlinear ARDL Framework” Festschrift in Honor of Peter Schmidt: Econometric Methods and Applications, eds. R. Sickels and W. Horrace: Springer, New York, 281–314.  Google Scholar
  71. Tam, P. S. (2018): “Global Trade Flows and Economic Policy Uncertainty”, Applied Economics 50, 3718–3734.  Google Scholar
  72. Wang, Y./Chen, C. R./Huang, Y. S. (2014): “Economic Policy Uncertainty and Corporate Investment: Evidence from China”, Pacific-Basin Finance Journal 26, 227–243.  Google Scholar
  73. Aftab, M./Syed, K. B. S./Katper, N. A. (2017): “Exchange-Rate volatility and Malaysian-Thai Bilateral Industry Trade Flows”, Journal of Economic Studies 44, 99–114.  Google Scholar
  74. Al-Shayeb, A./Hatemi-J., A. (2016): “Trade Openness and Economic Development in the UAE: An Asymmetric Approach”, Journal of Economic Studies 43, 587–597.  Google Scholar
  75. Al-Thaqeb, S. A./Algharabali, B. G. (2019): “Economic Policy Uncertainty: A Literature Review”, Journal of Economic Asymmetries 20, e00133, 1–11.  Google Scholar
  76. Arize, A. C./Malindretos, J./Igwe, E.U. (2017): “Do Exchange Rate Changes Improve the Trade Balance: An Asymmetric Nonlinear Cointegration Approach”, International Review of Economics and Finance 49, 313–326.  Google Scholar
  77. Armelius, H./Belfrage, C. J./Stenbacka, H. (2014): “The Mystery of the Missing World Trade Growth after the Global Financial Crisis.”, Sveriges Riksbank Economic Review 3, 7–22.  Google Scholar
  78. Baek, J. (2020): “An Asymmetric Approach to the Oil Prices-Trade Balance Nexus: New Evidence from Bilateral Trade between Korea and her 14 Trading Partners”, Economic Analysis and Policy 68, 199–209.  Google Scholar
  79. Baghestani, H./Kherfi, S. (2015): “An Error-Correction Modeling of US Consumer Spending: Are there Asymmetries?”, Journal of Economic Studies 42, 1078–1094.  Google Scholar
  80. Bahmani-Oskooee, M. (1986): “Determinants of International Trade Flows: The Case of Developing Countries,” Journal of Development Economics 20, 107–123.  Google Scholar
  81. Bahmani-Oskooee, M./Ghodsi, H. (2017): “Policy Uncertainty and House Prices in the United States of America”, Journal of Real Estate Portfolio Management 23, 73–85.  Google Scholar
  82. Bahmani-Oskooee, M./Ghodsi, H. (2018): “Asymmetric Causality between the U.S. Housing Market and its Stock Market: Evidence from State Level Data”, Journal of Economic Asymmetries 18, Article e00095, 1–8.  Google Scholar
  83. Bahmani-Oskooee, M./Harvey, H. (2022): “The U.S.-Canadian Trade and Exchange Rate Uncertainty: Asymmetric Evidence from 104 Industries”, The World Economy 45, 841–866.  Google Scholar
  84. Bahmani-Oskooee, M./Harvey, H./Niroomand, F. (2018a): “On the Impact of Policy Uncertainty on Oil Prices: An Asymmetry Analysis“, International Journal of Financial Studies 6(12), 1–11.  Google Scholar
  85. Bahmani-Oskooee, M./Kutan, A./Kones, A. (2016), “Policy Uncertainty and the Demand for Money in the United States”, Applied Economics Quarterly 62, 37–49.  Google Scholar
  86. Bahmani-Oskooee, M./Maki-Nayeri, M. (2019): “Asymmetric Effects of Policy Uncertainty on Domestic Investment in G7 Countries”, Open Economies Review 30, 675–693.  Google Scholar
  87. Bahmani-Oskooee, M./Maki-Nayeri, M. (2020): “Policy Uncertainty and Consumption in G7 Countries: An Asymmetry Analysis”, International Economics 163, 101–113.  Google Scholar
  88. Bahmani-Oskooee, M./Xu, J. (2022): “Whose Policy Uncertainty Matters in the Trade between China and the U.S.?”, Economic Change and Restructuring 55, 1497–1542.  Google Scholar
  89. Baker, S. R./Bloom, N./Davis, S. J. (2016): “Measuring Economic Policy Uncertainty”, Quarterly Journal of Economics 131, 1593–1636.  Google Scholar
  90. Brogaard, J./Detzel, A. (2015): “The Asset-Pricing Implications of Government Economic Policy Uncertainty”, Management Science 61, 3–18.  Google Scholar
  91. Durmaz, N. (2015): “Industry Level J-Curve in Turkey,” Journal of Economic Studies 42, 689–706.  Google Scholar
  92. Engle, R. F./Granger, C. W. J. (1987): “Cointegration and Error Correction: Representation, Estimation, and Testing,” Econometrica 55, 251–76.  Google Scholar
  93. Gogas, P./Pragidis, I. (2015): “Are there Asymmetries in Fiscal Policy Shocks?”, Journal of Economic Studies 42, 303–321.  Google Scholar
  94. Hajilee, M./Niroomand, F. (2019): “On the Link between Financial Market Inclusion and Trade Openness: An Asymmetric Analysis”, Economic Analysis and Policy 62, 373–381.  Google Scholar
  95. Hajilee, M./Niroomand, F. (2021): “Is there an Asymmetric Link between the Shadow Economy and the Financial Depth of Emerging Market Economies?“, Journal of Economic Asymmetries 23, Article e00192.  Google Scholar
  96. Halicioglu, F. (2007): “The J-Curve Dynamics of Turkish Bilateral Trade: A Cointegration Approach,” Journal of Economic Studies 34, 103–119.  Google Scholar
  97. Han, L./Qi, M./Yin, L. (2016): “Macroeconomic Policy Uncertainty Shocks on the Chinese Economy: A GVAR Analysis.” Applied Economics 48, 4907–4921.  Google Scholar
  98. Istiak, K./Alam, M. R. (2019): “Oil Prices, Policy Uncertainty and Asymmetries in Inflation Expectations“, Journal of Economic Studies 46, 324–334.  Google Scholar
  99. Jurado, K./Ludvigson, S. C./Ng, S. (2015): “Measuring Uncertainty”, American Economic Review 105, 1177–1216.  Google Scholar
  100. Kang, W./Ratti, R. (2013): “Oil Shocks, Policy Uncertainty and Stock Market Return”, International Financial Markets, Institutions, and Money 26, 305–318.  Google Scholar
  101. Ko, J.-H./Lee, C.-M. (2015): “International Economic Policy Uncertainty and Stock Prices: Wavelet Approach”, Economics Letters 134, 118–122.  Google Scholar
  102. Lima, L./Foffano Vasconcelos, C./Simão, J./de Mendonça, H. (2016): “The Quantitative Easing Effect on the Stock Market of the USA, the UK and Japan: An ARDL Approach for the Crisis Period”, Journal of Economic Studies 43, 1006–1021.  Google Scholar
  103. Nusair, S. A. (2017): “The J-curve Phenomenon in European Transition Economies: A Nonliear ARDL Approach”, International Review of Applied Economics 31, 1–27.  Google Scholar
  104. Pastor, L./Veronesi, P. (2013): “Policy Uncertainty and Risk Premia”, Journal of Financial Economics 110, 520–545.  Google Scholar
  105. Pesaran, M. H./Shin, Y./Smith, R. J. (2001): “Bounds Testing Approaches to the Analysis of Level Relationships,” Journal of Applied Econometrics 16, 289–326.  Google Scholar
  106. Shin, Y./Yu, B. C./Greenwood-Nimmo, M. (2014): “Modelling Asymmetric Cointegration and Dynamic Multipliers in a Nonlinear ARDL Framework” Festschrift in Honor of Peter Schmidt: Econometric Methods and Applications, eds. R. Sickels and W. Horrace: Springer, New York, 281–314.  Google Scholar
  107. Tam, P. S. (2018): “Global Trade Flows and Economic Policy Uncertainty”, Applied Economics 50, 3718–3734.  Google Scholar
  108. Wang, Y./Chen, C. R./Huang, Y. S. (2014): “Economic Policy Uncertainty and Corporate Investment: Evidence from China”, Pacific-Basin Finance Journal 26, 227–243.  Google Scholar

Abstract

A few previous studies that assessed the impact of policy uncertainty on trade flows assumed that the effects are symmetric. In this paper we argue that since traders’ expectations differ when uncertainty rises versus when it declines, effects could be asymmetric, which requires using nonlinear models. We test this argument by considering trade flows of 28 relatively large industries that trade between the United States and Germany. Estimates of symmetric and linear models for each industry revealed that while 35 % of industries were affected by both policy uncertainty measures in the short run, the long-run effects of both measures were negligible. In contrast, estimates of asymmetric and nonlinear models revealed that 75 % of exports in either direction were affected by both policy uncertainty measures in the short run. In the long run, however, 29 % (10 %) of U.S. exports were affected by U.S. (German) policy uncertainty, and not much of German exports were affected by either uncertainty measure.

Table of Contents

Section Title Page Action Price
Mohsen Bahmani-Oskooee / Ridha Nouira / Sami Saafi: Whose Policy Uncertainty Matters in the Trade between Germany and the United States: An Asymmetric Analysis 287
Abstract 287
I. Introduction 287
2. The Models and Methods 290
3. Results 293
4. Summary and Conclusion 305
References 306
Appendix 308
Data Definitions and Sources 308

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