The Effects of Jeopolitical Risks and Trade Policy Uncertainties on Economic Growth: Fourier Augmented ARDL Model
Chapter from the book:
Ertürkmen,
G.
(ed.)
2024.
Current Applications of Macroeconomics .
Synopsis
This study explores the impacts of geopolitical risks, trade policy uncertainty, petroleum and renewable energy consumption, capital, and labor on economic output in Turkey from 1985 to 2023. Employing Fourier augmented ARDL model, the analysis addresses structural breaks in both sharp and smooth forms, facilitating a thorough examination of the dataset. The results indicate that geopolitical risks and trade policy uncertainty have significant negative effects on GDP, underscoring the detrimental influence of uncertainties in international relations on economic stability. In contrast, energy consumption, capital investments, and labor dynamics are shown to positively affect GDP. Particularly, the findings highlight the importance of investments in renewable energy sources for achieving sustainable economic growth over the long term. These insights clarify the critical role of energy policies and labor dynamics in fostering economic growth. Finally, this study emphasizes the necessity for a strategic framework in sustainable economic development, suggesting that policymakers should pursue more effective solutions in these areas. The contributions of this research extend to both academic discourse and practical implications for economic policy.