The Impact of Trade War on G-7 Economies

This study aims to investigate the impact of trade war on G-7 economies. For this purpose a composite variable through the trade war proxies as used in the literature has been created. One proxy of Trade policy uncertainty shocks has been created following the Rigobon and Sack’s model. After creating the variable, the impact is tested through DCC Garch Model. The findings of the study reveal that past residual shocks exist for all series. However, time varying correlations does not exist for all the series particularly America, France, Japan and UK