Renewable energy and non-renewable energy consumption: assessing the asymmetric role of monetary policy uncertainty in energy consumption

Previous infant literature has assessed the symmetric impact of monetary policy uncertainty on a few macro variables. Our study has considered asymmetric monetary policy uncertainty impacts on energy consumption. Our key concern in this study is to regulate whether US monetary policy uncertainty has an asymmetric impact on energy consumption. We employ the symmetric and asymmetric autoregressive distributed lag (ARDL) estimation methods, and we found that monetary policy uncertainty has short- and long-run negative effects on renewable energy consumption in the linear model, while decreased monetary policy uncertainty has a significant negative influence on renewable energy consumption in the USA in the non-linear model. However, in the short and long run, the measure of monetary policy uncertainty has an insignificant impact on non-renewable energy consumption, while increased monetary policy uncertainty in the USA has negative effects and decreased monetary policy uncertainty has positive effects on non-renewable energy consumption in the short and long run in the non-linear model. The effects are asymmetric in direction and magnitude. The study results call for vital changes in renewable and non-renewable energy policies to accommodate monetary policy uncertainties.

Automated summary

This study finds that monetary policy uncertainty has asymmetric impacts on energy consumption, with different short- and long-term effects on renewable and non-renewable energy. The results suggest that significant changes are needed in energy policies to address monetary policy uncertainties.