Do Economic and Financial Stabilities Matter for Political Stability in Estonia?

This study aims to investigate the causal impact of economic and financial stability on political stability in Estonia. With the purpose of determining robust results for the study in mind, both traditional and modern causality methods are employed. To that end, we utilized the nonparametric Diks and Panchenko causality and frequency-domain Granger causality tests. Our nonparametric causality findings reveal that changes in economic and financial stability in Estonia lead to significant changes in political stability, thus indicating how economic and financial factors are important for political stability in Estonia. These results are consistent with findings from spectral causality at different frequencies.