Does crude oil price stimulate economic policy uncertainty in BRICS?

This paper applies the quantile Granger causality test, to explore whether the economic policy uncertainty (EPU) is affected by the crude oil price (COP) shocks in BRICS countries. The empirical results of the causal link present asymmetrical features, such that when the oil markets experience supply shocks, there is a positive influence on the EPU in China, India and Brazil. Moreover, a declining COP has an impact on the EPU in Russia and South Africa. Our findings are consistent with the real business cycle model of the oil price shocks, under the influence of the channels that determine the supply and demand. The BRICS EPU also has an impact on the oil market, but their degree of significance varies, and is related to the demand for oil. Understanding the relationship between EPU and oil markets in BRICS countries can assist policymakers to rebalance of the energy landscape, and also aid in the stabilization of national economies.