The Impact of Uncertainty in Economic Policy on the Load Capacity Factors in China and the United States (US): New Evidence from Novel Fourier Bootstrap ARDL Approach

Journal of Sustainability Research. 2025. Vol. 7. No. 1. Article e250002.

Kilinc-Ata N., Camkaya S., Akca M., Topal S.

The body of research on how uncertainty in economic policy affects load capacity factors has expanded quickly in recent years as concerns over the possible detrimental consequences of policy uncertainty on environmental sustainability are growing among scholars and policymakers. In this context, the primary aim of this research is to use annual data from the United States and China collected between 1985 and 2018 to examine the short- and long-term impacts of economic policy uncertainty on the load capacity factor. The study employed the Fourier Autoregressive Distributed Lag method to investigate the long- and shortterm effects of energy intensity and economic growth while the FourierToda-Yamamoto causality approach was utilized to assess the causal relationship between the variables. Findings show that whereas economic policy uncertainty temporarily improves environmental quality in China, it only has a long-term detrimental effect on environmental quality in the United States. Additionally, the findings demonstrate that energy intensity in both nations dramatically lowers environmental quality. Furthermore, there is also a causal relationship between economic policy uncertainty and economic growth in the United States along with economic growth and load capacity factor and energy intensity in China. These unidirectional causal relationships demonstrate the existence of a causal relationship. Effective policies should be developed to enhance environmental quality in China and the United States, taking into consideration the findings.

Keywords: Economic policy uncertainty, Sustainability, Environmental quality, Climate change

Publication based on the results of: Trends and factors of sustainable science and technology development (2025)