Does Economic Policy Uncertainty Affect Import? Evidence from Panel Data Analysis

Abstract

Uncertainty in the economy can have an impact on macroeconomic variables such as foreign trade and exchange rates. With the advancement of globalization and the increasing interdependence of economies, international trade is strongly affected by the uncertainty in the economy. Although there is no consensus in the literature regarding the effects of economic policy uncertainty on foreign trade, the general view emerged as a result of studies is that uncertainty suppresses trade flows. The aim of this study is to analyze the effect of economic policy uncertainty on the imports of 18 countries by using panel data techniques using annual data for the period 1997-2019. The country group discussed in the analysis was chosen considering the lack of access to data. The results show that economic policy uncertainty affects imports negatively in all countries examined in the period under review. Key Words: Economic Policy Uncertainty, Import, Panel Data Analysis JEL Classification: C33, D81, F14