Economic Uncertainty as a Sustainability Risk: Cross-Income Directional Evidence From 135 Countries

Abstract

This paper examines the direction of causality and the relationship between economic uncertainty, suicide rates, unemployment, economic growth, and trade openness across different income levels. By situating these relationships within a sustainability framework, the study conceptualises economic uncertainty as a systemic risk affecting social stability, labour markets, and long-term development trajectories. The analysis investigates 135 countries from 2000 to 2022, employing Granger causality and Multiple Linear Regression, with robustness tests using varying lag lengths to assess the reliability of the results. The findings reveal that economic uncertainty acts as a cross-dimensional sustainability stressor influencing socioeconomic systems across income strata, confirming prior evidence while extending it through Granger-causal analysis. Our findings show that in low-income countries economic uncertainty and unemployment rates have a bidirectional relationship. In lower-middle-income countries, suicide rates and trade openness affect economic uncertainty, while in upper-middle-income countries, suicide rates, economic growth, and trade openness affect economic uncertainty. Our findings suggest that economic uncertainty can be mitigated through improvements in mental healthcare services, the promotion of free trade agreements, advancements in education and technology, and fostering economic diversification. Recommendations for policymakers tailored to the 17 Sustainable Development Goals are provided in this study to mitigate uncertainty risks on sustainability. These findings contribute to sustainability science by demonstrating how uncertainty functions as a structural constraint on inclusive and resilient development pathways.