Role of Energy Policy in Shaping German-Russian Relations through Economic Policy Uncertainties: Insights from the Russo-Ukrainian War

We shed light ontheGerman-Russian relationship, focusing onthecomplexities that underlie their economic policy uncertainties over theperiod 1994–2023. We start with static unconditional correlation and dynamic conditional correlation analyses toexamine thestrength and temporal variations inthecorrelation between economic policy uncertainties ofthese two major countries. We then utilize standard and time-varying Granger causality analysis touncover causal relationships. Importantly, we use anovel energy policy uncertainty index for Germany toexplore interconnections between economic and energy policy uncertainties. We emphasize theimportance ofincorporating energy policy uncertainty ineconomic policy decision-making and international cooperation.