Uncertainty of Economic and Trade Policy,Geopolitical Risk and Information Flow of Food Price Fluctuation:Multi-scale Transfer Entropy Analysis Based on EEMD Model
Food price stability is one of the main objectives of a country's macroeconomic policy.With the coming of the 21st century,economic and political uncertainties are constantly rising and affect the fluctuation of food prices in a country.It is crucial to correctly understand the impact of economic and political uncertainties on food prices.The economic and trade policy uncertainty index is used to char-acterize the economic uncertainty,and the geopolitical risk index is used to characterize the political uncertainty.The collective empirical mode decomposition(EEMD)is used to construct high-frequen-cy components,low-frequency components and trend items through signal decomposition and recon-struction.The multi-scale signal transfer entropy matrix is constructed using the transfer entropy method,and the network characteristics of the transfer entropy matrix are analyzed based on the so-cial network method.Results indicate that there is a complex and multi-scale interaction between e-conomic and trade policy uncertainty,geopolitical risk and food price volatility,which is mainly reflec-ted in the medium and long-term effects.In other words,economic and trade policy uncertainty,geo-political risk affect the medium and long-term fluctuations of food prices in the long term,and the me-dium and long-term fluctuations of food prices affect the medium and long-term fluctuations of eco-nomic policy uncertainty.In the medium and long term,food price volatility plays a more important role in the entire interactive network.Geopolitical risk and trade policy uncertainty have a one-way impact on food price volatility,while economic policy uncertainty has a two-way impact on food price volatility.In view of the above conclusion,the following suggestions are put forward:to maintain the stability of economic and trade policies in the medium and long term and focus on the impact of geopo-litical risks on food price volatility.There is need to continue to follow the guidance of Xi Jinping's thought on building a community with a shared future for mankind,commit to multilateral coopera-tion and mutual benefit,and reduce China's geopolitical risks in the long run.
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