Asymmetric response of Investor sentiment to Economic Policy Uncertainty, interest rates and oil price uncertainty: Evidence from OECD countries

Guenich, Hassen; Khalfaoui, Hamdi; Chouaibi, Néjib

doi:10.1080/23322039.2022.2151113

Cited by 9 publications

(3 citation statements)

References 62 publications

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“…EPU has a positive impact on income inequality, with the coefficient of 0.019 implying that a 1% increase in EPU leads to an increase in inequality by 1.9%, thereby leading the study to accept our first hypothesis. The findings are unsurprising because a rise in EPU invites fear and risk among investors (Guenich et al, 2022), as well as businesses to expand their operations, and with consumers cutting their spending to caution about their future. All this leading to lower levels of economic activity and employment uncertainties, which contribute to income disparity.…”

Section: Resultsmentioning

confidence: 99%

Economic policy uncertainty and income inequality: unveiling the effects of friendly business environment

Farooq,

Chisti,

Rasheed

et al. 2023

Bus Strat Dev

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Recent pandemic in the form of COVID‐19 has been associated with increasing income inequalities because of high uncertainty around the globe. As a result, we examined the nexus between economic policy uncertainty (EPU) and inequality and how this relation is moderated by friendly business environment reflected by ease of doing business (EODB). To understand the relation among the different dimensions several techniques like fixed effects model, Driscoll and Kraay, and panel quantile regression were employed for a sample of 20 countries ranging for the period of 12 years. Our findings show that EPU contributes to higher levels of overall income inequality (Gini‐Index) and the results are heterogenous across countries, however the concentration of wealth among top 10% rich people gets reduced with increased EPU. Additionally, we find EODB moderating the impact of EPU on income inequality by mitigating the adverse effects of EPU on income inequality. Finally, we combined the results across different proxies and models to propose suggestive policy recommendations.

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Section: Resultsmentioning

confidence: 99%

Economic policy uncertainty and income inequality: unveiling the effects of friendly business environment

Farooq,

Chisti,

Rasheed

et al. 2023

Bus Strat Dev

View full text Add to dashboard Cite

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“…This asymmetry may also depend on the market conditions, such as the level of volatility, liquidity, and sentiment. Similarly, PU may affect the investment and production decisions of firms differently depending on whether they face positive or negative uncertainty shocks [67]. Firms may postpone or cancel their investment plans when facing high uncertainty, but they may not increase their investment when facing low uncertainty.…”

Section: Plos Onementioning

confidence: 99%

Economic policy uncertainty and stock market in G7 Countries: A panel threshold effect perspective

et al. 2023

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Based on the literature, it is commonly understood that stock prices (SP) are influenced by economic policy uncertainty (PU), with a rise in PU typically having a negative impact on SP. However, the relationship between PU and SP may not always be linear due to the varying risk preferences of individuals. Risk preference theory posits that individuals respond differently to different levels of risk. Therefore, this study aims to investigate whether PU determines SP asymmetrically (i.e., in a non-linear manner) by considering risk preferences and addressing a gap in the literature. To answer this question, the study employs a panel threshold approach to examine the effect of PU on SP in the Group of Seven (G7) countries, namely Canada, France, Germany, Italy, Japan, UK, and the US. In contrast to previous research, this study finds evidence of an asymmetric effect of PU on SP in the G7 countries. Specifically, the panel threshold results reveal that the impact of increased PU on SP is positive up to a certain level (Threshold1), beyond which it becomes negative (Threshold2). These findings are in line with information asymmetry hypothesis, prospect theory, behavioural finance hypothesis, and market liquidity hypothesis and shed light on the asymmetric behaviour of SP in response to varying levels of PU. The implications of these findings are significant for understanding how to manage risks effectively in the financial markets.

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“…Sentiment analysis, an advanced computational technique extensively discussed by scholars such as Guenich et al (2022) and Guo et al (2023), intricately traverses a vast expanse of individual opinions, evaluations, attitudes, and emotions. Its application extends beyond the confines of diverse entities, encompassing products, services, and organizations.…”

Section: Sentiment Analysismentioning

confidence: 99%

Tweeting the economy: Analyzing social media sentiments and macroeconomic indicators

Fitriani,

Amalyah Agus

2023

JIBE

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This research aims to examine the correlation between social media sentiment and the Consumer Confidence Index (CCI) as well as Gross Domestic Product (GDP) in Indonesia. Data were collected through web scraping from Twitter (now also known as X) spanning from 2019 to 2022 on a monthly basis. Using Pearson and Kendall’s Tau correlation tests, the study found that the correlation between Twitter sentiment and the CCI is not significant. However, there is a significant correlation between Twitter sentiment from news accounts and GDP The findings indicate that the views and perceptions expressed in social media sentiment, particularly from news accounts on Twitter, could serve as an initial indicator of Indonesia's GDP.

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Asymmetric response of Investor sentiment to Economic Policy Uncertainty, interest rates and oil price uncertainty: Evidence from OECD countries

Cited by 9 publications

References 62 publications

Economic policy uncertainty and income inequality: unveiling the effects of friendly business environment

Economic policy uncertainty and income inequality: unveiling the effects of friendly business environment

Economic policy uncertainty and stock market in G7 Countries: A panel threshold effect perspective

Tweeting the economy: Analyzing social media sentiments and macroeconomic indicators

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