The Unassuming Economist

From a paper by Deepak Kushawaha, Abhishek Gorsi, Ankit Singh Kharwar & Abhishek Singh:

“This paper explores the impact of renewable energy (RE) generation on energy inflation in India using an ARDL model with data from 1974 to 2023. The findings show that RE generation has a significant long-term positive effect on energy inflation, probably due to the high initial infrastructure costs. These results challenge the divine coincidence hypothesis, suggesting that while RE helps cut emissions, it might also drive-up inflation. This analysis does not critique RE development but highlights the need for a nuanced understanding of its economic impacts. To counteract these inflationary pressures, policies should focus on increasing investments in RE research and development, implementing effective energy storage solutions, and upgrading grid infrastructure to balance economic growth, inflation control, and environmental sustainability.”

From a paper by Afees A. Salisu & Abeeb O. Olaniran:

“This study evaluates the predictability of energy uncertainty in relation to economic activity across the global and the large open economy of the United States. Two distinct objectives guide the research: first, to explore the nexus between energy uncertainty and economic activity using various metrics, and second, to examine how well energy uncertainty enhances the forecast performance of economic activity across three different benchmark models, including a random walk with and without drift, and a historical average. The analysis incorporates two lag structures to capture additional dynamics, ensuring a comprehensive understanding of the relationship between energy uncertainty and economic activity. Results indicate that heightened energy uncertainty generally stifles economic activity, although this effect weakens over a longer lag structure. This finding is consistent for both in-sample and out-of-sample forecasts, and remains robust even when certain fundamentals are incorporated as controls, highlighting the strength of the research. These findings hold significant implications for both micro- and macroeconomic perspectives, underscoring the potential contribution of this research to the field of economics. The implications for policymakers are particularly noteworthy, as they provide valuable insights for decision-making in the energy sector.”

From a chapter by Salil Seth, Mrinal Kanti Mahato, and Parveen Yadav:

“Confronted with proliferating geopolitical risks emanating from energy producers, the energy security of the European Union (EU) is surrounded by plethora of challenges. Amid high volatility in energy prices, political disruptions and energy supply constraints, myriad hurdles are in the offing for energy security in EU. The current energy policy of the EU, which emphasizes competition, sustainability, and a secure supply chain, requires revitalization. A roadmap should be established to develop energy security strategies. This work performs systematic data mining for drawing literature in line with the mentioned road map-based objectives.The intention of the work is to facilitate EU with conceptualized framework strategies pertaining to energy security. This is anticipated to act as a trailblazer for energy protagonists like sustainability engineers, energy policy drafters, energy supply chain intermediaries, and strategy makers and incubate the concept with reference to the EU. This will enable the EU to overcome challenges in the energy security and at the same time set a benchmark for other competing nations.”

From a paper by Neeraj Nautiyal, Mobeen Ur Rehman, Rami Zeitun, and Xuan Vinh Vo:

“We investigate how socially responsible investment (SRI) funds respond to different oil-induced price shocks, using Ready’s (2018) approach. Using daily data for six SRI indices from March 8, 2016, to November 29, 2024, we apply wavelet coherence and nonlinear causality methods to analyze the time-frequency relationship between oil shocks and SRI fund performance across different market states. Our findings reveal that supply and risk shocks play a significant role in driving the co-movement between oil price dynamics and SRI funds’ behavior returns, particularly at medium and lower frequencies, respectively. Risk shocks exhibit a systemic influence, consistently dominating supply and demand shocks, especially in the pre-2021 period and during the COVID-19 pandemic, though their effects fizzle out in stable market conditions. Quantile causality estimates confirm the strong predictive power of risk shocks, particularly at lower quantiles. Our work presents practical implications for ethical investors, dealing with oil-related market risks.”

From a paper by John Beirne, and Nuobu Renzhi:

“This paper provides estimates of oil price pass-through (OPPT) to both producer and consumer prices for nine emerging Asian economies using a time-varying parameter SVAR model over the period 1991–2023. We further examine how global factors affect the transmission of oil prices to producer and consumer prices, specifically via shocks in global output, US monetary policy, and global financial market uncertainty. Overall, we find that OPPT is less than proportionate and mostly higher for OPPT to producer than consumer prices, while pass-through estimates also tend to be higher in the long term. In addition, we find that OPPT has been declining for most Asian EMEs in the period after the global financial crisis of 2008. Finally, while the responsiveness of OPPT to global shocks varies depending on the type of shock, contractionary US monetary policy shocks overall most significantly amplify OPPT for both producer and consumer prices.”