A Theoretical Model of Price Volatility Transmission between Cryptocurrency Markets and Renewable Energy Stock Indices

2026-03-06T11:22:46+00:00

This paper proposes a theoretical framework to model the price volatility transmission between cryptocurrency markets and the renewable energy stock sector. We develop a novel Factor-Augmented Dynamic Conditional Correlation GARCH (FA-DCC-GARCH) model, which extends the standard multivariate GARCH approach by incorporating observable, time-varying factors that represent core transmission mechanisms. This provides a structural blueprint for future empirical investigation. The model posits that volatility transmission is driven by three primary channels: (1) the Energy Consumption link from crypto mining; (2) a shared Investment Sentiment and Diversification channel reflecting investor risk appetite; and (3) a Policy and Regulatory channel for exogenous shocks. Our framework predicts asymmetric volatility transmission, with stronger spillovers from crypto to renewables during periods of high uncertainty.By deconstructing the spillover effects, the model offers a nuanced understanding beyond purely empirical studies and provides a robust set of testable hypotheses for assessing the time-varying risks and diversification benefits between these critical markets.

Inflation-Unemployment Dynamics in the Context of the Phillips Curve

2026-03-16T09:37:57+00:00

This paper studies how US inflation dynamics have evolved as labor-market institutions weakened and expectations became more central to price-setting. Using quarterly data from 1984Q1–2023Q4, we estimate Phillips-Curve-style regressions that allow inflation to depend on expected inflation, lagged inflation, and interactions between unemployment and union density, and we complement these results with a multivariate vector autoregression (VAR) to trace dynamic responses. Three findings emerge. First, inflation is best explained by a joint expectations–persistence component: expected inflation, lagged expectations, and lagged inflation together account for substantially more variation in inflation than specifications based on unemployment or the output gap alone. Second, interaction between the unemployment–union-density is economically meaningful, consistent with weaker collective bargaining dampening the wage channel and contributing to a flatter inflation–slack relationship. Third, VAR impulse responses indicate that expectation shocks transmit to inflation primarily over short horizons, while inflation persistence remains a dominant propagation mechanism. These results imply that inflation stabilization increasingly depends on anchoring expectations and understanding labor-market structure, rather than relying on slack measures as sufficient statistics for inflationary pressure.

Journal of Reviews on Global Economics

A Theoretical Model of Price Volatility Transmission between Cryptocurrency Markets and Renewable Energy Stock Indices

Inflation-Unemployment Dynamics in the Context of the Phillips Curve