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Effects of economic policy uncertainty on energy demand: evidence from 72 countries

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  • Yaman Omer Erzurumlu
  • Giray Gozgor

Abstract

This paper examines the effects of economic policy uncertainty on final energy consumption per capita in the panel dataset of 72 countries from 1960 to 2016. Economic policy uncertainty is captured by the World Uncertainty Indices (WUI). We firstly utilize the panel unit root tests with cross-sectional dependence to confirm the stationarity of the series. Secondly, we run various estimation techniques, such as fixed-effects, random-effects, and feasible generalized least squares. The results indicate that income is positively related to energy demand. However, a higher energy price decreases energy consumption, and the WUI is also negatively associated with energy consumption. These findings are robust to exclude the oil-exporter and the Organisation for Economic Co-operation and Development countries from the panel dataset. Finally, the Machado-Santos Silva quantile regression estimations show that the related effects of the income, energy price and the WUI on energy demand are valid at the different quantiles.

Suggested Citation

  • Yaman Omer Erzurumlu & Giray Gozgor, 2022. "Effects of economic policy uncertainty on energy demand: evidence from 72 countries," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 20(1), pages 23-38, January.
    • Handle: RePEc:taf:jocebs:v:20:y:2022:i:1:p:23-38
    DOI: 10.1080/14765284.2021.2009999
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    Cited by:

    1. Lin, Boqiang & Zhang, Zongyou, 2025. "Anchoring security in uncertainty: The dynamic responses of China's energy imports to geopolitical risk shocks," Energy, Elsevier, vol. 335(C).
    2. Hu Fu & Sunil Tiwari & Emad Kazemzadeh & Emmanuel Yamoah Cobbold & Sudeshna Ghosh & Buhari Doğan, 2026. "Green Growth and Gender Equality: The Role of Political Empowerment and Renewable Energy in Sustainable Development," Sustainable Development, John Wiley & Sons, Ltd., vol. 34(S1), pages 1018-1042, January.
    3. Shang, Yunfeng & Han, Ding & Gozgor, Giray & Mahalik, Mantu Kumar & Sahoo, Bimal Kishore, 2022. "The impact of climate policy uncertainty on renewable and non-renewable energy demand in the United States," Renewable Energy, Elsevier, vol. 197(C), pages 654-667.
    4. Wenxia Shi & Danish & Burcu ozcan & Salahuddin khan, 2026. "Economic Policy Uncertainty, Financial Development, and Renewable Energy Consumption in BRIC," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 17(2), pages 4120-4139, April.
    5. Mitra, Gaurav & Gupta, Vandana & Gupta, Gaurav, 2025. "Global uncertainties and performance of Indian firms: A comparative study of geopolitical risk and economic policy uncertainty," Finance Research Letters, Elsevier, vol. 86(PA).
    6. Ye, Shiqi & Zhang, Hongyin & Zhou, Mo & Zheng, Tingguo, 2025. "Assessing energy sector resilience to adverse shocks: A scenario-based QVAR approach," Energy Economics, Elsevier, vol. 149(C).
    7. Fang, Jianchun & Gozgor, Giray & Mahalik, Mantu Kumar & Mallick, Hrushikesh & Padhan, Hemachandra, 2022. "Does urbanisation induce renewable energy consumption in emerging economies? The role of education in energy switching policies," Energy Economics, Elsevier, vol. 111(C).
    8. Doan, Thang Ngoc & Nguyen, Trung Thanh, 2025. "Energy uncertainty and energy trade: International evidence," Energy, Elsevier, vol. 319(C).
    9. Lan, Yueqin & Krishnan, Deepika & Zheng, Jiyuan, 2023. "Impact of international trade on crude oil in political unstable economies: Evidence from quantile regression," Resources Policy, Elsevier, vol. 83(C).
    10. Lu, Zhou & Gozgor, Giray & Mahalik, Mantu Kumar & Padhan, Hemachandra & Yan, Cheng, 2022. "Welfare gains from international trade and renewable energy demand: Evidence from the OECD countries," Energy Economics, Elsevier, vol. 112(C).
    11. Zhang, Xincheng, 2024. "Country-level energy-related uncertainties and stock market returns: Insights from the U.S. and China," Technological Forecasting and Social Change, Elsevier, vol. 204(C).

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