Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/331949 
Year of Publication: 
2025
Citation: 
[Journal:] German Economic Review (GER) [ISSN:] 1468-0475 [Volume:] 26 [Issue:] 1 [Year:] 2025 [Pages:] 15-33
Publisher: 
De Gruyter, Berlin
Abstract: 
We examine how trade and policy uncertainty affect shipping freight rates, using a Bayesian Vector Autoregression (BVAR) model. Trade uncertainty has a strong effect on shipping costs, even though the effects become insignificant within a year. On the other hand, policy uncertainty has a slightly smaller initial effect but tends to have longer-lasting effects on shipping costs. Trade uncertainty tends to benefit European stocks, perhaps as investors may believe that consumers will shift to local companies, with the impact on US stocks also being (mildly) positive, despite the (lagged) deterioration in economic activity. Trade uncertainty tends to have a longer-lasting impact on GDP than policy uncertainty, given then known merits of comparative advantage, while the effect of policy uncertainty is higher in the European markets compared to the US ones.
Subjects: 
international trade
freight rates
policy uncertainty
shipping costs
trade uncertainty
JEL: 
E31
R4
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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