Testing the asymmetric causal nexus of housing-oil prices and pandemic uncertainty in four major economies

Abstract

The spread of COVID-19 worldwide has shown how quick global economy can become affected when ones’ health and future are at risk. This paper examines the evidence of Granger causality among the housing price, the unemployment rate, crude oil price, and world pandemic uncertainty in France, Germany, the UK, and the USA over the period 1996Q1–2019Q2. In this case, the linear and asymmetric Granger causality approaches of Toda-Yamamoto and Hatemi-J are respectively applied to provide useful insight. Although only significant evidence of linear Granger causality is found among the unemployment rate and the house prices in all the four economies, the investigations revealed asymmetric evidence involving the world pandemic uncertainty. Specifically, there is a significant uni-directional asymmetric Granger causality from the world pandemic uncertainty to the house price in France, Germany, and the USA but not in the UK. The variation in the results among the examined countries is explained by potential differences in economic structures or business cycle and other social and economic factors. Thus, relevant policy guidance is implied from the results especially for the policymakers in the examined countries.

Impact of the COVID-19 on foreign direct investment inflows in emerging economies: evidence from panel quantile regression

“…With the index, it is aimed to catch up uncertainties of the global pandemics namely SARS, Avian flu (H5N1), Swine flu (H1N1), Middle East respiratory syndrome (MERS), Bird flu, Ebola, COVID-19, and Influenza (H1V1) [ 29 ]. There are limited papers that have investigated the economic impacts of the pandemic uncertainty index [ 6 , 23 , 52 ]. Besides, there is only one study [ 29 ] that has focused on the relationship between pandemic uncertainty and foreign investment, where the main motivation of this study was triggered.…”

Analyzing the impact of container shipping service reliability on global supply chain pressure: An asymmetric approach

“…If one or both of the series contains unit root, the maximum integration value is set to 1, while if neither of the series contains unit root, it is set to 0. Another advantage of determining the maximum degree of integration in the analyze process and adding it to the unrestricted VAR model is to overcome the long-term loss of information, because when the difference-taking process is applied to the series, it causes loss of information in the long run (Alola and Uzuner, 2021).…”

Fragility of FDI flows in sub-Saharan Africa region: does the paradox persist?

“…Since its occurrence in Africa in February 2020 [ 8 ], the outbreak of the virus has extended not only in Africa but across the globe. The various efforts of countries, as specified by the World Health Organization, to reduce the spread of the disease, primarily movement restrictions and border closures, limited economic activity to the bare minimum [ 11 ]. As it was, the health crisis has resulted in additional economic, social, and political crisis primarily for Africa’s developing economies, leaving affected countries with unending consequences [ 44 ].…”

“…Also, the rebound from the extensive downturn stimulated by the COVID-19 pandemic has been extremely asymmetrical among countries, particularly leaving a good proportion of the low-income countries hanging [ 11 ], while high-income economies are rebounding at a faster speed. It is rather shocking to note that only about half of developing countries are likely to achieve their pre-pandemic level of income per capita, worsening their already deplorable impoverishment [ 46 ].…”