Global Economy

Currently, the global community is on the threshold of a transition from fossil fuels as a result of transformations such as climate change, entailing the strict implementation of carbon setoff policies and quick progress in green technologies. A transition to clean, low-carbon energies will not only disrupt the global energy system, it will also impact the global economy and political dynamism within and without all states. Based on these transformations, the present article asks the question of how the energy transition will impact the geopolitical future of the global oil economy. The authors hypothesize the following in answer to this question: Given the superior, more advanced position of economic powers such as China and the US in clean energy technologies, we are likely to witness the weakening of traditional oil powers in a post-carbon world, such as the Middle East and North African countries (MENA) and Russia; in contrast, the balance of power will tilt heavily towards current energy consumers. Technology-savvy countries have the knowledge to reproduce and stabilize their power in the global economy. The traditional countries of the energy sector, however, face shortfalls in their infrastructure and modern technologies and will lose their geopolitical position to a large extent.

Financial markets are one of the most fundamental markets in any country. In the financial markets, the securities market and the foreign exchange market are sensitive sectors. These two markets are affected by fluctuations and economic cycles so reflect economic changes rapidly. Changes in the returns of one market due to arbitrage conditions during time lead to changes in the returns of other markets. This paper by dividing the spillover effect into two parts, mean effect and volatility effect, employing DCC-GARCH method, aimed to capture the spillover effects of dollar return, global market and Iran financial market in the period 1394-1398. Mean conditional results show that stock returns react negatively to dollar returns. In other words, there is a substitution between dollar returns and stock returns among economic agents. For the global economy, the stock market returns decreases with the fluctuations of the global economy index, but for the dollar, the relationship is reversed so that increase in the global economy index volatility increases the dollar return. For the volatility spillover, the results also supported strong spillover between each market pairs.