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Oil price shocks, economic policy uncertainty and industrial economic growth in China

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  • Jingyu Chen
  • Faqi Jin
  • Guangda Ouyang
  • Jian Ouyang
  • Fenghua Wen

Abstract

This paper combines a Granger causality test and a VAR model to investigate the relationships among oil price shocks, global economic policy uncertainty (GEPU), and China’s industrial economic growth. Based on monthly data from 2000 to 2017, we reveal that GEPU and world oil prices jointly Granger cause China's industrial economic growth; world oil prices have a positive effect on China's industrial economic growth, while GEPU has a negative effect. Further analyses investigate the asymmetry effect of oil prices and find that the negative component shows a more significant impact on China's industrial economic growth. The results are robust to different oil price and EPU proxies.

Suggested Citation

  • Jingyu Chen & Faqi Jin & Guangda Ouyang & Jian Ouyang & Fenghua Wen, 2019. "Oil price shocks, economic policy uncertainty and industrial economic growth in China," PLOS ONE, Public Library of Science, vol. 14(5), pages 1-19, May.
    • Handle: RePEc:plo:pone00:0215397
    DOI: 10.1371/journal.pone.0215397
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