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Role of Energy Policy in Shaping German-Russian Relations through Economic Policy Uncertainties: Insights from the Russo-Ukrainian War

Author

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  • Burak Pirgaip
  • Mehmet Baha Karan
  • Kazim Baris Atici

Abstract

We shed light on the German-Russian relationship, focusing on the complexities that underlie their economic policy uncertainties over the period 1994-2023. We start with static unconditional correlation and dynamic conditional correlation analyses to examine the strength and temporal variations in the correlation between economic policy uncertainties of these two major countries. We then utilize standard and time-varying Granger causality analysis to uncover causal relationships. Importantly, we use a novel energy policy uncertainty index for Germany to explore interconnections between economic and energy policy uncertainties. We emphasize the importance of incorporating energy policy uncertainty in economic policy decision-making and international cooperation.

Suggested Citation

  • Burak Pirgaip & Mehmet Baha Karan & Kazim Baris Atici, 2025. "Role of Energy Policy in Shaping German-Russian Relations through Economic Policy Uncertainties: Insights from the Russo-Ukrainian War," Politická ekonomie, Prague University of Economics and Business, vol. 2025(4), pages 657-685.
    • Handle: RePEc:prg:jnlpol:v:2025:y:2025:i:4:id:1465:p:657-685
    DOI: 10.18267/j.polek.1465
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    References listed on IDEAS

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    1. Grebe, Moritz & Kandemir, Sinem & Tillmann, Peter, 2024. "Uncertainty about the war in Ukraine: Measurement and effects on the German economy," Journal of Economic Behavior & Organization, Elsevier, vol. 217(C), pages 493-506.
    2. Shen, Lihua & Hong, Yanran, 2023. "Can geopolitical risks excite Germany economic policy uncertainty: Rethinking in the context of the Russia-Ukraine conflict," Finance Research Letters, Elsevier, vol. 51(C).
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    Keywords

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    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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