How Economic and Monetary Policy Uncertainty Affect Climate Policy Uncertainty in the United States?

Policy uncertainties can directly affect the outcomes of policies to be implemented and other related policies. Therefore, it is important to reduce policy uncertainties. Identifying policy uncertainties and related factors is important in this regard. This study examines the impact of economic and monetary policy uncertainty on climate policy uncertainty in the United States. The relationship between the variables is examined asymmetrically using monthly data for 1988-2022. First, the “Augmented Dickey-Fuller Unit Root Test” and the “Fractional Frequency Fourier Augmented Dickey-Fuller Unit Root Test” are applied. The Asymmetric Wavelet Transform Coherence Test is also used to determine the direction and frequency of the relationship between the variables. Asymmetric time-varying causality analysis was used for the causality dimension. The significant relationship between “economic policy uncertainty”, “monetary policy uncertainty” and “climate policy uncertainty” varies at different time periods.