Principal investigator (project leader): Prof. Claudiu ALBULESCU

Description / Summary

As a response to growing environmental concerns, the interest for identifying the economic elements that prevent the environmental degradation increased. At the same time, the economic and financial impact of environmental and energy policies gained the interest of researchers and policy makers. Nevertheless, the effectiveness of environmental regulations is put into question, even at the level of EU countries, which act as a world leader for the environmental protection. Moreover, the effects of environmental and energy policies at macroeconomic level does not represent a clear-cut and the empirical analyses conducted in this line provided mixed findings. Against this background, we posit that the policy-induced economic uncertainty impacts the producers, consumers and portfolio investment behavior, influencing thus the relationship between environment, energy use and macro-financial variables. In this line, we develop a harmonized uncertainty index for all EU countries, which serves as a basis for our empirical analyses. The research proposal will be developed on three research directions. The first direction is designed to investigate how do economic policy uncertainty and countries’ energy security influence the connection between oil and financial assets prices. Under the second research direction, we analyze the impact of uncertainty, environmental regulations and new energy sources on greenhouse gas emissions. In the third research direction we investigate the effect of economic policy uncertainty, sustainable finance practices and shocks in oil prices on the EU banks’ stability, using bank-level data from Orbis Bank Focus.