The COVID-19 storm and the energy sector: The impact and role of uncertainty.

ABSTRACT: Prior research has shown that energy sector stock prices are impacted by uncertainty. The coronavirus (COVID-19) pandemic has given rise to widespread health and economic-related uncertainty. In this study, we investigate the magnitude and the timing of the impact of COVID-19 related uncertainty on returns and volatility for 20 national energy indices and a global energy index using ARCH/GARCH models. We propose a novel "overall impact of uncertainty" (OIU) measure, explained using a natural phenomenon analogy of the overall impact of a rainstorm, to gauge the magnitude and intensity of the impact of uncertainty on energy sector returns. Drawing upon economic psychology, COVID-19 related uncertainty is measured in terms of searches for information relating to COVID-19 as captured by Google

SUBMITTER: Szczygielski JJ 

PROVIDER: S-EPMC8996045 | biostudies-literature | 2022 May

REPOSITORIES: biostudies-literature