Does geopolitics trigger energy inflation in the European economic area? Evidence from a panel time-varying regression

IF 2.5 Q3 MANAGEMENT
G. Olasehinde-Williams, I. Olanipekun, O. Usman
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Abstract

Purpose This paper aims to examine the reaction of energy inflation to geopolitical risks in the European Economic Area between 1990 and 2015. Design/methodology/approach This study applies the nonparametric time-varying coefficient panel data model with fixed effects. In addition, to further reveal potential tail effects that may not have been captured by conditional mean-based regressions, the method of moments quantile regression was also used. Findings The findings of this study are as follows: first, as European countries get exposed to geopolitical tensions, it is expected that energy prices will surge. Second, the ability of geopolitical risk to trigger energy inflation in recent times is not as powerful as it used to be. Third, countries with a lower inflation rate, when exposed to geopolitical risks, experience smaller increases in energy inflation compared to countries with a higher inflation rate. Research limitations/implications The findings of this study lead us to the conclusion that transitioning from nonrenewable to renewable energy use is one channel through which the sampled countries can battle the energy inflation, which geopolitical risks trigger. A sound macroeconomic policy for inflation control is a complementary channel through which the same goal can be achieved. Originality/value Given the increasing level of energy inflation and geopolitical risks in the world today, this study is an attempt to reveal the time-varying characteristics of the relationship between these variables in European countries using a nonparametric time-varying coefficient panel data model and method of moments quantile regression with fixed effects.
地缘政治是否会引发欧洲经济区的能源通胀?来自时变回归的证据
本文旨在考察1990年至2015年间欧洲经济区能源通胀对地缘政治风险的反应。本研究采用固定效应的非参数时变系数面板数据模型。此外,为了进一步揭示基于条件均值的回归可能无法捕获的潜在尾部效应,还使用了矩分位数回归方法。本研究的发现如下:首先,由于欧洲国家受到地缘政治紧张局势的影响,预计能源价格将大幅上涨。其次,近期地缘政治风险引发能源通胀的能力已不像过去那么强大。第三,与通胀率较高的国家相比,通胀率较低的国家在面临地缘政治风险时,能源通胀的增幅较小。研究局限/启示本研究的发现使我们得出结论,从不可再生能源到可再生能源的使用过渡是样本国家对抗地缘政治风险引发的能源通胀的一个渠道。控制通货膨胀的健全宏观经济政策是实现同样目标的补充渠道。原创性/价值鉴于当今世界能源通胀和地缘政治风险水平不断上升,本研究试图利用非参数时变系数面板数据模型和固定效应矩分位数回归方法揭示欧洲国家这些变量之间关系的时变特征。
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来源期刊
CiteScore
6.80
自引率
22.60%
发文量
63
期刊介绍: The International Journal of Energy Sector Management aims to facilitate dissemination of research on issues relating to supply management (covering the entire supply chain of resource finding, extraction, production, treatment, conversion, transportation, distribution and retail supply), demand and usage management, waste management, customer and other stakeholder management, and solutions thereto. The journal covers all forms of energy (non-renewable and renewable), forms of supply (centralised or decentralised), ownership patterns (public or private, cooperative, joint, or any other), market structures (formal, informal, integrated, disintegrated, national, international, local, etc.) and degress of commoditisation (e.g. internationally traded, regionally traded, non-traded, etc.). The journal aims to cover a wide range of subjects relevant to the management of the energy sector, including but not limited to: Management of scarce resources (economic, financial, human and natural), projects, activities and concerns (e.g. regulatory, social and environmental aspects), technologies and knowledge Business strategy, policy and planning as well as decision support systems for energy sector management Business organisation, structure and environment, and changes thereto Globalisation and multi-cultural management Management of innovation, change and transition.
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