COVID-19 Outbreak and US Economic Policy Uncertainty: An ARDL Approach

12 Pages Posted: 4 Sep 2020

See all articles by Adelajda Matuka

Adelajda Matuka

Università degli Studi di Macerata, Department of Economic & Financial Institutions (DIEF), Department of Economics and Law

Date Written: September 2, 2020

Abstract

The outbreak of COVID-19 is generating shock waves to financial markets and the real economy all over the world and the depth of the recession coming ahead depends on policy response. This paper investigates the impact of COVID-19 (measured by the number of new cases and deaths) and brent oil prices on the economic policy uncertainty of the United States. I use daily data from 1 January to 25 August 2020 and I use an Autoregressive Distributed Lag (ARDL) model to estimate the relation of COVID-19, oil price dynamics and policy uncertainty. The findings indicate that new infection cases in the US have a significant effect on the US EPU, while there is no significant impact of death cases on economic policy uncertainty. Further, there is an inverse relation between brent oil prices and policy uncertainty meaning that economic policy uncertainty will increase as brent oil prices decrease.

Keywords: COVID-19, EPU, oil prices

JEL Classification: E52, E61, F62, G01

Suggested Citation

Matuka, Adelajda, COVID-19 Outbreak and US Economic Policy Uncertainty: An ARDL Approach (September 2, 2020). Available at SSRN: https://ssrn.com/abstract=3685346 or http://dx.doi.org/10.2139/ssrn.3685346

Adelajda Matuka (Contact Author)

Università degli Studi di Macerata, Department of Economic & Financial Institutions (DIEF), Department of Economics and Law ( email )

Macerata
Italy
3318828862 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
50
Abstract Views
825
PlumX Metrics