Export file:


  • RIS(for EndNote,Reference Manager,ProCite)
  • BibTex
  • Text


  • Citation Only
  • Citation and Abstract

Covid-19, oil price and UK economic policy uncertainty: evidence from the ARDL approach

Department of Business Administration, Shahjalal University of Science and Technology, Sylhet, Bangladesh

Special Issues: Special Issue on the Economic and Financial Impact of “COVID-19”

This study attempts to investigate how the spread of coronavirus (COVID-19) influence the UK economic policy uncertainty. Using daily data ranging from 11 March 2020 to 7 May 2020, an ARDL model has been applied in this study to capture both the short-run and long-run impact of COVID-19 on economic policy uncertainty. Additionally, the influence of Brent oil price on economic policy uncertainty is also examined. Based on the ARDL result, it is found that both COVID-19 new cases and new deaths reported in the UK have a strong and positive association with the UK economic policy uncertainty in the long-run. However, Brent oil price shows an inverse connection with economic policy uncertainty in the long run.
  Article Metrics

Keywords COVID-19; oil price; economic policy uncertainty; short-run; long-run; ARDL

Citation: Saeed Sazzad Jeris, Ridoy Deb Nath. Covid-19, oil price and UK economic policy uncertainty: evidence from the ARDL approach. Quantitative Finance and Economics, 2020, 4(3): 503-514. doi: 10.3934/QFE.2020023


  • 1. Al-Awadhi AM, Al-Saifi K, Al-Awadhi A, et al. (2020) Death and contagious infectious diseases: Impact of the COVID-19 virus on stock market returns. J Behav Exp Financ, 100326.
  • 2. Albulescu C (2020) Do COVID-19 and crude oil prices drive the US economic policy uncertainty? arXiv preprint arXiv:2003.07591.
  • 3. Alekhina V, Yoshino N (2019) Exogeneity of world oil prices to the Russian Federation's economy and monetary policy. Eurasian Econ Rev 9: 531-555.    
  • 4. Alexopoulos M, Cohen J (2015) The power of print: Uncertainty shocks, markets, and the economy. Int Rev Econ Financ 40: 8-28.    
  • 5. Aloui R, Gupta R, Miller SM (2016) Uncertainty and crude oil returns. Energ Econ 55: 92-100.    
  • 6. Antonakakis N, Chatziantoniou I, Filis G (2014) Dynamic spillovers of oil price shocks and economic policy uncertainty. Energ Econ 44: 433-447.    
  • 7. Baker SR, Bloom N, Davis SJ (2016) Measuring economic policy uncertainty. Q J Econ 131: 1593-1636.    
  • 8. BBC News (2020) Coronavirus: UK interest rates slashed again in emergency move. Available from: https://www.bbc.com/news/business-51962982.
  • 9. BBC News (2020) PM announces strict new curbs on life in UK. Available from: https://www.bbc.com/news/uk-52012432.
  • 10. Berger T, Uddin GS (2016) On the dynamic dependence between equity markets, commodity futures and economic uncertainty indexes. Energ Econ 56: 374-383.    
  • 10. Chen X, Sun X, Li J (2020) How does economic policy uncertainty react to oil price shocks? A multi-scale perspective. Appl Econ Lett 27: 188-193.
  • 12. Conlon T, McGee R (2020) Safe haven or risky hazard? Bitcoin during the COVID-19 bear market. Financ Res Lett 35: 101607.
  • 13. Chuah LL, Loayza N, Myers CB (2020) The Fight against Corruption: Taming Tigers and Swatting Flies. World Bank Research and Policy Briefs, 145050. Available from: http://documents.worldbank.org/curated/en/294321578642864410/The-Fight-against-Corruption-Taming-Tigers-and-Swatting-Flies.
  • 14. Corbet S, Larkin C, Lucey B (2020) The contagion effects of the COVID-19 pandemic: Evidence from gold and cryptocurrencies. Financ Res Lett 35: 101554.    
  • 15. Corbet S, Hou Y, Hu Y, et al. (2020) Aye Corona! The contagion effects of being named Corona during the COVID-19 pandemic. Financ Res Lett, 101591.
  • 16. Demir E, Ersan O (2017) Economic policy uncertainty and cash holdings: Evidence from BRIC countries. Emerg Mark Rev 33: 189-200.    
  • 17. Dietrich A, Keuster K, Müller GJ, et al. (2020) News and uncertainty about covid-19: Survey evidence and short-run economic impact. Working paper 20(12). Federal Reserve Bank of Cleveland.
  • 18. Ding W, Levine R, Lin C, et al. (2020) Corporate immunity to the COVID-19 pandemic (No. w27055). National Bureau of Economic Research.
  • 19. Duca JV, Saving JL (2018) What drives economic policy uncertainty in the long and short runs: European and US evidence over several decades. J Macroecon 55: 128-145.    
  • 20. Goodell JW (2020) COVID-19 and finance: Agendas for future research. Financ Res Lett 35: 101512.    
  • 21. Giles C (2020) BoE warns UK set to enter worst recession for 300 years. Financial Times. Available from: https://www.ft.com/content/734e604b-93d9-43a6-a6ec-19e8b22dad3c.
  • 22. Hailemariam A, Smyth R, Zhang X (2019) Oil prices and economic policy uncertainty: Evidence from a nonparametric panel data model. Energ Econ 83: 40-51.    
  • 23. Hamilton JD (1983) Oil and the macroeconomy since World War II. J Polit Econ 91: 228-248.    
  • 24. He Z, Niu J (2018) The effect of economic policy uncertainty on bank valuations. Appl Econ Lett 25: 345-347.    
  • 25. Henderson R (2020) Fitch downgrades UK debt citing coronavirus impact. Financial Times.
  • 26. Iqbal U, Gan C, Nadeem M (2019) Economic policy uncertainty and firm performance. Appl Econ Lett 27: 765-770.
  • 27. Jasper J, Julia K (2020) Bank of England drafts action plan to head off coronavirus recession. Guardian. Available from: https://www.theguardian.com/business/2020/mar/05/coronavirus-could-push-uk-to-brink-of-recession-says-goldman-sachs.
  • 28. Kang W, Ratti RA (2013) Oil shocks, policy uncertainty and stock market return. J Int Financ Mark Inst Money 26: 305-318.    
  • 29. Kang W, Ratti RA, Vespignani JL (2017) Oil price shocks and policy uncertainty: New evidence on the effects of US and non-US oil production. Energ Econ 66: 536-546.    
  • 30. Kaufmann D, Kraay A, Mastruzzi M (2011) The worldwide governance indicators: methodology and analytical issues. Hague J Rule Law 3: 220-246.    
  • 31. Loayza NV, Pennings S (2020) Macroeconomic policy in the time of covid-19: A primer for developing countries. Research & Policy Brief No.28.
  • 32. McKibbin WJ, Fernando R (2020) The global macroeconomic impacts of COVID-19: Seven scenarios. CAMA Working Paper.
  • 33. Mei D, Zeng Q, Zhang Y, et al. (2018) Does US Economic Policy Uncertainty matter for European stock markets volatility? Phys A 512: 215-221.    
  • 34. Narayan P (2004) Reformulating critical values for the bounds F-statistics approach to cointegration: an application to the tourism demand model for Fiji, Australia: Monash University, 1-40.
  • 35. Narayan S, Narayan PK (2005) An empirical analysis of Fiji's import demand function. J Econ Stud 32: 158-168.    
  • 36. Nyamela Y, Plakandaras V, Gupta R (2019) Frequency-dependent real-time effects of uncertainty in the United States: evidence from daily data. Appl Econ Lett, 1-5.
  • 37. Pesaran MH, Shin Y, Smith RJ (2001) Bounds testing approaches to the analysis of level relationships. J Appl Econometrics 16: 289-326.    
  • 38. Phillip I, Richard P, Mark S (2020) Coronavirus: Bank of England makes emergency interest rate cut. Guardian. Available from: https://www.theguardian.com/business/2020/mar/11/coronavirus-bank-of-england-makes-emergency-interest-rate-cut.
  • 39. Qamruzzaman M, Jianguo W (2019) SME financing innovation and SME development in Bangladesh: An application of ARDL. J Small Bus Entrepreneurship 31: 521-545.    
  • 40. Sahinoz S, Cosar EE (2018) Economic policy uncertainty and economic activity in Turkey. Appl Econ Lett 25: 1517-1520.    
  • 41. Sharif A, Aloui C, Yarovaya L (2020) COVID-19 Pandemic, Oil Prices, Stock Market and Policy Uncertainty Nexus in the US Economy: Fresh Evidence from the Wavelet-Based Approach. Available from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3574699.
  • 42. Sum V (2013) Economic policy uncertainty in the United States and Europe: A cointegration test. Int J Econ Financ 5: 98-101.
  • 43. Sun X, Chen X, Wang J, et al. (2018) Multi-scale interactions between economic policy uncertainty and oil prices in time-frequency domains. North Am J Econ Financ 51.
  • 44. Tiwari AK, Jana RK, Roubaud D (2019) The policy uncertainty and market volatility puzzle: Evidence from wavelet analysis. Financ Res Lett 31: 278-284.
  • 45. Tom B, Charlotte W (2020) Hunt for contacts of coronavirus-stricken pair in York. The Times. ISSN 0140-0460. Available from: https://www.thetimes.co.uk/article/hunt-for-contacts-of-coronavirus-stricken-pair-in-york-dh363qf8k.
  • 46. WHO (2020) Coronavirus disease (COVID-19) outbreak. Available from: https://www.who.int/westernpacific/emergencies/covid-19.
  • 47. Worldometer (2020) Coronavirus Pandemic. Available from: https://www.worldometers.info/coronavirus/.
  • 48. Wu J, Zhang J, Zhang S, et al. (2020) The economic policy uncertainty and firm investment in Australia. Appl Econ 52: 3354-3378.    
  • 49. Yang L (2019) Connectedness of economic policy uncertainty and oil price shocks in a time domain perspective. Energ Econ 80: 219-233.    
  • 50. Zaremba A, Kizys R, Aharon DY, et al. (2020) Infected Markets: Novel Coronavirus, Government Interventions, and Stock Return Volatility around the Globe. Financ Res Lett 35: 101597.    
  • 51. Zhang D, Hu M, Ji Q (2020) Financial markets under the global pandemic of COVID-19. Financ Res Lett, 101528.
  • 52. Zhao Y, Li J, Yu L (2017) A deep learning ensemble approach for crude oil price forecasting. Energ Econ 66: 9-16.    


Reader Comments

your name: *   your email: *  

© 2020 the Author(s), licensee AIMS Press. This is an open access article distributed under the terms of the Creative Commons Attribution Licese (http://creativecommons.org/licenses/by/4.0)

Download full text in PDF

Export Citation

Copyright © AIMS Press All Rights Reserved