Energy Economics Letters

Asymmetric responses of industrial output to oil price volatility: A GARCH approach in East Asia-Pacific developing countries

2025-07-27T05:20:59-05:00

Crude oil represents a vital energy source essential for sustaining economic manufacturing activity and growth. Energy reliability is an absolute requirement for economic growth and development to occur. Widespread transmission across the economy becomes more complicated and nonlinear because of both business cycle patterns and policy changes. This study examines the asymmetric responses of industrial output to oil price volatility in East Asia-Pacific developing countries. The research utilizes monthly data from January 1997 to December 2024 on Brent oil prices and industrial production in these countries. It employs DCC and CDCC-GARCH models for symmetric analysis, while advanced asymmetric GARCH models (GJR-GARCH, FIEGARCH, HYGARCH) are used to detect asymmetric relationships. The results reveal significant differences in the effects of positive versus negative oil price shocks on industrial output growth. Symmetric GARCH models show weak correlations between oil price volatility and output, whereas asymmetric GARCH models uncover significant nonlinear and asymmetric relationships. The findings indicate that industrial output in East Asia-Pacific developing economies responds more strongly to oil price increases than decreases. The study concludes that the relationship between oil price volatility and industrial output growth is asymmetric, characterized by persistent and clustered volatility patterns. Furthermore, asymmetric GARCH models significantly outperform their symmetric counterparts in capturing these dynamics.

Energy consumption in Nigeria and socio-economic implications: Evidence from household data

2025-09-15T21:22:25-05:00

The purpose of this study is to examine energy consumption, its socioeconomic determinants, and implications with evidence from household data. The multinomial logistic regression model was used for analysis using data from the General Household Survey 2024 for Nigeria. The findings of this study reveal that per capita expenditure and education are major determinants of kerosene use. While sector shows a significant determinant of coal use for cooking. The determinants of household energy for lighting indicate that regular blackouts and electricity expenditure are major determinants of battery use, and sector influences the use of candles. It is suggested that rural sector electrification should be enhanced and that efforts should be geared towards subsidizing environmentally friendly energy sources for people who do not have the means and currently depend on firewood for survival.

The cautious march of central banks toward climate policy measures

2025-10-08T00:40:29-05:00

This study examines central banks' cautious yet evolving approach toward integrating climate-related policy measures within their mandates. An extensive literature search finds that unconventional monetary and collateral-based policies have the possibility of violating the market neutrality rules and may face political resistance. Regarding carbon tax, central banks can play a supportive rather than a pivotal role, and stress-testing, which can be an effective tool to disclose climate risk, is still nascent. Furthermore, a binomial logistic regression model has been employed using three key indicators: green bond issuance, carbon intensity of GDP, and the green macroprudential index, along with GDP and climate vulnerability as control variables across 55 countries. Results show that although central banks are the dominant climate risk regulators in most countries studied, their involvement does not significantly predict superior green financial outcomes. Notably, a negative association is observed between regulatory stringency and central bank enforcement, suggesting that non-central bank institutions may administer mature green regulations. The jackknife method indicates that central banks can be an efficient facilitator of green bond issuance when the data of the United States, the key opponent of green central banking, is excluded from the model. The study recommends a clearly defined mandate for central banks and advocates for coordinated monetary-fiscal strategies to ensure effective and balanced climate action.