Impact of climate and economic policy uncertainties on inflation in India: using the vector error correction model approach

IF 1.7 Q2 ECONOMICS

Asia-Pacific Journal of Regional Science Pub Date : 2025-05-07 DOI:10.1007/s41685-025-00381-x

A. Akshaya, B. V. Gopalakrishna

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引用次数: 0

Abstract

Economic policies are designed to address challenges in the economic environment and mitigate future associated risks and uncertainties. The present study addressed the impact of policy uncertainties such as climate policy uncertainty (CPU) and economic policy uncertainty (EPU) on price inflation in India. The data were sourced from the Reserve Bank of India and Policy Uncertainty databases from April 2004 to March 2024. Descriptive statistics and stationarity tests were conducted to analyze the characteristics of the variables. Johansen’s cointegration test assessed the long-term relationships among the regressors. The vector error correction model (VECM) and impulse response function (IRF) were used to evaluate long-run equilibrium dynamics and the responsiveness of inflation to policy uncertainties. The empirical outcomes specified a significant relationship between inflation and economic policy uncertainty, while climate policy uncertainty exhibited an insignificant positive effect on inflation. These findings suggest that policy uncertainties influence inflation and broader economic stability. The study emphasizes the importance of formulating coherent and stable economic policies to mitigate inflationary pressures and foster economic resilience.

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气候和经济政策不确定性对印度通货膨胀的影响：使用矢量误差修正模型方法

经济政策旨在应对经济环境中的挑战，减轻未来相关的风险和不确定性。本研究探讨了气候政策不确定性（CPU）和经济政策不确定性（EPU）等政策不确定性对印度物价通胀的影响。这些数据来自印度储备银行和政策不确定性数据库，时间为2004年4月至2024年3月。采用描述性统计和平稳性检验分析各变量的特征。约翰森协整检验评估回归量之间的长期关系。利用矢量误差修正模型（VECM）和脉冲响应函数（IRF）来评估长期均衡动态和通货膨胀对政策不确定性的响应性。实证结果表明，通货膨胀与经济政策不确定性之间存在显著关系，而气候政策不确定性对通货膨胀的正向影响不显著。这些发现表明，政策的不确定性会影响通货膨胀和更广泛的经济稳定。该研究强调了制定连贯和稳定的经济政策以减轻通胀压力和增强经济韧性的重要性。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Asia-Pacific Journal of Regional Science Social Sciences-Urban Studies

CiteScore

3.10

自引率

7.10%

发文量

期刊介绍： The Asia-Pacific Journal of Regional Science expands the frontiers of regional science through the diffusion of intrinsically developed and advanced modern, regional science methodologies throughout the Asia-Pacific region. Articles published in the journal foster progress and development of regional science through the promotion of comprehensive and interdisciplinary academic studies in relationship to research in regional science across the globe. The journal’s scope includes articles dedicated to theoretical economics, positive economics including econometrics and statistical analysis and input–output analysis, CGE, Simulation, applied economics including international economics, regional economics, industrial organization, analysis of governance and institutional issues, law and economics, migration and labor markets, spatial economics, land economics, urban economics, agricultural economics, environmental economics, behavioral economics and spatial analysis with GIS/RS data education economics, sociology including urban sociology, rural sociology, environmental sociology and educational sociology, as well as traffic engineering. The journal provides a unique platform for its research community to further develop, analyze, and resolve urgent regional and urban issues in Asia, and to further refine established research around the world in this multidisciplinary field. The journal invites original articles, proposals, and book reviews.The Asia-Pacific Journal of Regional Science is a new English-language journal that spun out of Chiikigakukenkyuu, which has a 45-year history of publishing the best Japanese research in regional science in the Japanese language and, more recently and more frequently, in English. The development of regional science as an international discipline has necessitated the need for a new publication in English. The Asia-Pacific Journal of Regional Science is a publishing vehicle for English-language contributions to the field in Japan, across the complete Asia-Pacific arena, and beyond.Content published in this journal is peer reviewed (Double Blind).