Global Economic Policy Uncertainty and Global Economic Leaders’ Influence on Regional Economic Growth

This study aims to evaluate the regional economic growth of select American, European, and Asian countries amidst global economic uncertainty. The proposed methodology incorporates mixed frequencies in the data (VAR-MIDAS), facilitating the assessment of their reliance on lagged values, the impact of economic growth in other countries within the same region, and the influence of Global Economic Policy Uncertainty (GEPU). This sheds light on the effects of economic news from relevant newspapers on GDP growth. The primary hypothesis suggests a significant influence of other countries within the same region and the two major global economic powers on the Gross Domestic Product (GDP) growth of each studied region, namely the United States and China. This research also examines this hypothesis across 19 GEPU-included economies, categorizing them regionally by continent. The econometric results confirm the influence of the two leading economies on economic growth and identify causal relationships, with GEPU also exhibiting effects on GDP. Additionally, in-sample estimations reveal disparities in the influence of leaders on the economic growth of the examined economies.