Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/238446 
Year of Publication: 
2020
Series/Report no.: 
ADBI Working Paper Series No. 1089
Publisher: 
Asian Development Bank Institute (ADBI), Tokyo
Abstract: 
This study utilizes a time-varying parameter Bayesian vector autoregressive model to investigate the dynamic interactions between geopolitical risk (GPR) and renewable energy consumption growth (RECG). The identification strategy is flexible to accommodate cases both with and without sign restrictions. It is shown that GPR shocks have positive impacts on RECG over time. In contrast, RECG shocks decrease GPR in the whole sample period. These results show that renewable energy is a useful tool to reduce geopolitical risks. Meanwhile, the increasing geopolitical risks tend to augment renewable energy consumption. We also provide the responses at different time horizons and during particular geopolitical events. The estimating results are robust when industrial production growth is used as a control variable. Lastly, several implications for economic policy making are discussed.
Subjects: 
renewable energy consumption
geopolitical risk
time-varying parameter VAR model
robustness checks
JEL: 
Q20
D80
C11
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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