Policy uncertainty and international financial markets: the case of Brexit

Belke, Ansgar; Dubova, Irina; Osowski, Thomas

doi:10.1080/00036846.2018.1436152

Cited by 100 publications

(72 citation statements)

References 15 publications

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“…Apart from the most recent crises, the impact of uncertainty on the real and the financial sector is a constantly recurring topic in the academic literature. Some intriguing questions that typically emerge in this context: How does uncertainty affect the economy and financial variables (Belke, Dubova, and Osowski 2017;Belke and Goecke 2005)? What are the transmission channels of uncertainty (Bloom 2013;Dixit 1989;Pindyck 1991)?…”

Section: Introductionmentioning

confidence: 99%

International Effects of Euro Area Versus U.S. Policy Uncertainty: A Favar Approach

Belke

Osowski

2018

Economic Inquiry

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in

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Section: Introductionmentioning

confidence: 99%

International Effects of Euro Area Versus U.S. Policy Uncertainty: A Favar Approach

Belke

Osowski

2018

Economic Inquiry

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“…Belke, Dubova, and Osowski [3] argue that financial market volatility increases with Brexit and spills over into markets through different channels. Thus uncertainty about Brexit may not only affect shares and exchange rate markets in the UK, but might also trigger spillover across EU countries.…”

Section: Literature Reviewmentioning

confidence: 99%

“…As data for the EU and UK stock markets suggest and as emphasized by several authors including Raddant [1] Busch & Matthes [2] and Belke, Dubova, & Osowski [3], stock prices tumbled sharply post-Brexit. The volatility of stock market index is crucial for the related economies as it affects capital inflow and GDP growth substantially.…”

Section: Introductionmentioning

confidence: 99%

Post-Brexit Stock Market Volatility and European Central Bank Reaction Function

Anaraki¹

2018

JFE

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The European stock markets experienced enormous volatility in stock markets post-Brexit era, which wasn't observed before the shock. The volatility in financial markets has disturbed economic fundamentals including capital flow and economic growth in several European countries. To avoid such disturbances the monetary authorities have to implement a monetary reaction function by adopting an appropriate range for short-term interest rate consistent with the volatility of stock markets and depreciation of British pound. The monetary reaction function in this case shouldn't be only based on traditional Taylor's rule but also needs to take into account the volatility of stock markets and depreciation of pound versus major currencies. The goal of this paper is twofold. First, it tries to estimate the effects of Brexit on stock market volatility index for British FTSE, German DAX, and French CAC using econometric models and a dummy variable for post-Brexit. Second, it uses a Vector Auto Regression (VAR) model to stimulate the monetary reaction function of the European Central Bank (ECB) to find out how it may neutralize the adverse effects of stock market volatility on macroeconomic fundamentals. Section 4 discusses the estimated econometric results, and finally section 5 provides findings and conclusions.

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“…The evidence raised from the study conducted by Belke, Dubova, and Osowski (2016) shows that Brexit-induced policy uncertainty will continue to cause instability in key financial markets and has the potential to damage the real economy in both the UK and other European countries, even in the medium run. The main losers outside the UK are the "GIIPS" economies: Greece, Ireland, Italy, Portugal and Spain.…”

Section: Economic Literature Review On Brexit Impact On Capital and Fmentioning

confidence: 99%

Brexit Implications on Capital Market and International Financial Governance

Cardi¹

2017

JMAA

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This paper assumes as a focal point the concept that the "post-Brexit" may represent a change of era for European and global financial service and particularly for capital market sector. The change of era produces new "global systemic interrelation" in which financial globalization, governance and regulation will give place to new, largely unknown complexities. In general, the different interests and immediate priorities of euro and non-euro countries, coupled with a need for prompt and, at times, politically sensitive action, have had the result of a greater fragmentation or a differentiated integration in EU governance in the financial sector. On this assumption, we may say that the post-Brexit scenario is in some way preceded by a series of "fractures" in European governance. The direct effect of the post-Brexit era is that UK regulated financial entities will still need "passporting" across the EU single market: UK is going to vest the role of third party country, which will require an "equivalence regime" similar to the "substituted compliance" used in the same direction by US regulators.At the same time, while an equivalence regime may work in principle to deal cross-border issues at the global level, in the long term, it may be an instrument for a "battle of ideas" in the new political arena of global financial governance.

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Policy uncertainty and international financial markets: the case of Brexit

Cited by 100 publications

References 15 publications

International Effects of Euro Area Versus U.S. Policy Uncertainty: A Favar Approach

International Effects of Euro Area Versus U.S. Policy Uncertainty: A Favar Approach

Post-Brexit Stock Market Volatility and European Central Bank Reaction Function

Brexit Implications on Capital Market and International Financial Governance

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