Does a sanitary crisis drive oil prices and carbon emissions in the USA? Evidence from VECM modeling

Abstract

This study explores the interdependence among a sanitary crisis, environmental degradation, oil prices, and economic activity in the USA based on weekly data over the period from January 03, 2020, to October 02, 2020, through VECM and Granger causality methods. The study period is characterized by lockdowns and mobility restrictions due to COVID-19 pandemic that may affect the economic and energy sector in the USA. Thus, a meticulous analysis of the impact of a sanitary crisis on economic and energy sectors seems to be crucial. Findings are very interesting and confirm the existence of a significant impact of a COVID-19 pandemic on WTI oil price. More importantly, bidirectional causal relations between the three couples: COVID-19 infections-carbon emission, COVID-19 infections-economic growth, and COVID-19 infections-oil price are also discovered. Taken together, our empirical findings are effective for the relevant authorities and policymakers in the USA to develop an appropriate financial and fiscal policy such as reducing interest rates, subsidizing, promoting sustainable industrialization, and carbon taxation to boost investment and to recover the economic growth without harming the environment and complicating the sanitary situation.

Bitcoin versus Commodity assets: Impact on the US equity market before and after COVID-19 crisis: Evidence from PLS regression

“…Indeed, the deadly virus hits rapidly almost all countries and the number of con rmed cases and deaths increased quickly, especially in the US that recorded the most con rmed cases. In fact, due to this global pandemic, the United States registered a large human toll reaching 55407793 total infection cases and 845806 total deaths until December 2021; a number that goes far beyond the number of American deaths in the Vietnam War (Gam 2021). Since then, this pandemic has seriously deteriorated not only global healthcare systems but also it has had wide-ranging and enormous impacts on nancial markets, energy and world economy due to the fact that many countries in the world adopt strict quarantine policies.…”

“…Since then, this pandemic has seriously deteriorated not only global healthcare systems but also it has had wide-ranging and enormous impacts on nancial markets, energy and world economy due to the fact that many countries in the world adopt strict quarantine policies. Indeed, following the novel COVID-19 pandemic outbreak, the international market crude oil has recorded an important downturn (Gam, 2021). More speci cally, the crude oil price has experienced a substantial fall.…”