scholarly journals Testing for Causality between Oil Prices and Money Supply in Saudi Arabia (Note 1)

2020 ◽  
Vol 6 (4) ◽  
pp. p58
Author(s):  
Moayad Al Rasasi, PhD ◽  
John H. Qualls, PhD ◽  
Sultan Almutairi
Keyword(s):  
Causal Relationship ◽  
Money Supply ◽  
Oil Prices ◽  
Saudi Arabian ◽  
Causality Analysis ◽  
Price Shocks ◽  
Monthly Data ◽  
Causality Relationship ◽  
The Impact ◽  
Fiscal And Monetary Policy

The impact of oil price shocks on a country’s economy has been well studied in the economic literature. However, until now, articles analyzing the impact of these shocks on the Saudi Arabian economy have been relatively sparse. This paper attempts to shed some light on this important topic by examining the causal relationship between oil prices and an important monetary variable, the M3 (broad-based) money supply. Monthly data going back to 1982 were used in this study, which employs unit root tests and Granger causality analysis to test whether there is a causal relationship or not. No discernable causality relationship was found; this lack of such link leads the authors to conclude that this may be due to the prudent and stable fiscal and monetary policy on the part of the Kingdom’s government and its central bank, the Saudi Arabian Monetary Authority (SAMA).

Monetary policy and the effect of the transfer of oil prices to inflation

2020 ◽  
pp. 41-50
Author(s):  
Ph. S. Kartaev ◽  
I. D. Medvedev
Keyword(s):  
Monetary Policy ◽  
Inflation Targeting ◽  
Dynamic Models ◽  
Oil Prices ◽  
Oil Price ◽  
Oil Price Shocks ◽  
Negative Effects ◽  
Price Shocks ◽  
Policy Regime ◽  
The Impact

The paper examines the impact of oil price shocks on inflation, as well as the impact of the choice of the monetary policy regime on the strength of this influence. We used dynamic models on panel data for the countries of the world for the period from 2000 to 2017. It is shown that mainly the impact of changes in oil prices on inflation is carried out through the channel of exchange rate. The paper demonstrates the influence of the transition to inflation targeting on the nature of the relationship between oil price shocks and inflation. This effect is asymmetrical: during periods of rising oil prices, inflation targeting reduces the effect of the transfer of oil prices, limiting negative effects of shock. During periods of decline in oil prices, this monetary policy regime, in contrast, contributes to a stronger transfer, helping to reduce inflation.

scholarly journals The Impacts of Oil Prices, Exchange Rate and COVID-19 Pandemic on BIST Petrochemical Market

2021 ◽  
Vol 7 (1) ◽  
pp. 17-33
Author(s):  
Seval Mutlu Çamoğlu
Keyword(s):  
Exchange Rate ◽  
Raw Materials ◽  
Oil Prices ◽  
Stock Market Index ◽  
Monthly Data ◽  
Information Index ◽  
Market Index ◽  
The Impact ◽  
Index Exchange ◽  
Liberal Market Economy

Stock markets are developing with the economic growth of the countries in a liberal market economy. Petrochemicals is an indicator of the performance of the country's industry with high inter-industry linkage by providing input to several sectors, producing various outputs with a certain number of raw materials. The COVID-19 pandemic period has affected all markets worldwide and caused fluctuations in the index values of large firms in the petrochemical industry in Borsa Istanbul (BIST). This study analyzes the impact of the pandemic period and change in the oil prices and exchange rate on the petrochemical market in Turkey. The monthly data of petrochemical stock market index, exchange rate, oil prices are used in this time series analysis. A pandemic information index representing the COVID-19 pandemic was derived and included in the model. According to the results, it is observed that the most important determinant of the fluctuations on the BIST petrochemical index is the oil prices. While a shock in oil prices negatively affects the BIST petrochemical index, the petrochemical index responds positively to the shock in the pandemic index.

Financial Marketing-Based Role of Exchange Rate to Increase Foreign Trade in Turkey

2020 ◽  
pp. 21-46
Author(s):  
Özgür Kiyak ◽  
Bilge Afşar
Keyword(s):  
Exchange Rate ◽  
Foreign Trade ◽  
Foreign Exchange ◽  
Cointegration Analysis ◽  
Causality Analysis ◽  
Monthly Data ◽  
Decrease Rate ◽  
Long Run ◽  
Causality Relationship

This chapter tries to determine whether there is a causal relationship between exchange rate and foreign trade. The study includes monthly data between February 2003 and December 2018 including dollar foreign exchange selling rate and inflation related real exchange rate for exchange rate, and export amount, import amount, export increase/decrease rate, and import increase. Increase/decrease rate is used for foreign trade among other variables, for a total of 6 variables. According to the obtained results of Engle-Granger cointegration analysis, there is a cointegration between variables in the long run. However, according to the results of the Toda-Yamamoto causality analysis, it was understood that there is no causality relationship between exchange rate and foreign trade.

scholarly journals The Impact of Oil Prices on the Economy of Vietnam

2015 ◽  
Vol 22 (04) ◽  
pp. 142-159
Author(s):  
Hoa Nguyen Thi Lien ◽  
Trang Tran Thu ◽  
Giang Nguyen Le Ngan
Keyword(s):  
Industrial Production ◽  
Oil Prices ◽  
Test Results ◽  
Macroeconomic Performance ◽  
Price Shocks ◽  
Short Term ◽  
Correction Model ◽  
The Impact ◽  
The Relationship

In this paper we study the relationship between oil prices and macroeconomic performance by investigating the impact of oil price shocks on key macroeconomic variables of Vietnam over the 2001–2012 period. In order to test the relationship between oil prices and the value of industrial production, we use cointegration method to consider the long-term relationship and Error Correction Model (ECM) to ponder the short-term one. The test results show that the price of oil and the value of industrial production in Vietnam are positively correlated in the long term, whereas in the short term the volatility of oil prices in the last two months will negatively affect the fluctuation in the value of the current industrial production.

scholarly journals Can Major Public Health Emergencies Affect Changes in International Oil Prices?

2021 ◽  
Vol 18 (24) ◽  
pp. 12955
Author(s):  
An Cheng ◽  
Tonghui Chen ◽  
Guogang Jiang ◽  
Xinru Han
Keyword(s):  
Public Health ◽  
Influenza A ◽  
Oil Prices ◽  
Monthly Data ◽  
Wild Poliovirus ◽  
Public Health Emergencies ◽  
Influenza A H1n1 ◽  
Abrupt Changes ◽  
Republic Of The Congo ◽  
The Impact

In order to deepen the understanding of the impact of major public health emergencies on the oil market and to enhance the risk response capability, this study analyzed the logical relationship between major public health emergencies and international oil price changes, identified the change points, and calculated the probability of abrupt changes to international oil prices. Based on monthly data during six major public health emergencies from 2009 to 2020, this study built a product partition model. The results show that only the influenza A (H1N1) and COVID-19 pandemics were significant reasons for abrupt changes in international oil prices. Furthermore, the wild poliovirus epidemic, the Ebola epidemic, the Zika epidemic, and the Ebola epidemic in the Democratic Republic of the Congo had limited effects. Overall, the outbreak of a Public Health Emergency of International Concern (PHEIC) in major global economies has a more pronounced impact on international oil prices.

scholarly journals Impact of Exchange Rate and Oil Prices on Inflation in Pakistan

2021 ◽  
Vol 7 (2) ◽  
pp. 177-185
Author(s):  
Tahira Bano Qasim ◽  
Hina Ali ◽  
Alina Baig ◽  
Maria Shams Khakwani
Keyword(s):  
Exchange Rate ◽  
Unit Root ◽  
Inflation Rate ◽  
Oil Prices ◽  
Oil Price ◽  
Integration Testing ◽  
Integration Technique ◽  
Monthly Data ◽  
Unit Root Testing ◽  
The Impact

This study investigates the impact of Exchange Rate (Rupees Vs US $) and oil prices (Pak. Petroleum) and on the inflation rate in Pakistan by applying the Co-Integration technique to the monthly data for all the three series ranging from January 2004 to January 2019.  Unit root testing results provide strong statistical evidence for each of the series to be non-stationary at the level and stationary at first difference. Co-integration testing results confirm the existence of Cointegration among the selected time series.  Moreover, the empirical results of the regression of inflation on the exchange rate and oil price also lead to conclude that both the series have a strong statistical significant impact on inflation in Pakistan.

Identifying asymmetric responses of sectoral equities to oil price shocks in a NARDL model

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Abderrazak Dhaoui ◽  
Julien Chevallier ◽  
Feng Ma
Keyword(s):  
Interest Rate ◽  
Financial Market ◽  
Oil Prices ◽  
Oil Price ◽  
Policy Implications ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Asymmetric Responses ◽  
The Impact ◽  
Nardl Model

AbstractThis study examines the asymmetric responses of sector stock indices returns to positive and negative fluctuations in oil prices using the NARDL model. Our empirical findings support indirect transmissions of oil price fluctuation to the financial market through industrial production and short-term interest rate. Furthermore, both direct and indirect impacts of oil price shocks on stock returns are sector dependent. These results are with substantial policy implications either for investors or for policymakers. They mainly help government authorities to reduce the instability in financial markets caused by the major oil price shocks. The analysis of the impact of oil price shocks on stock markets also helps the financial market participants to adjust their decisions and revise their coverage of energy policy that is substantially affected by the turbulence and uncertainty in the crude oil market. Finally, based on the forecast of the oil price shocks effects, the central bank should adjust the interest rate in order to face up to the inflation rate induced by oil prices since oil prices act as an inflationary factor.

scholarly journals Governance of public spending avenues by oil prices, oil revenues, and GDP in Saudi Arabia: proportionate sensitivity and trend analysis

2020 ◽  
Vol 17 (4) ◽  
pp. 152-164
Author(s):  
Anis Ali
Keyword(s):  
Saudi Arabia ◽  
Public Spending ◽  
Price Volatility ◽  
Secondary Data ◽  
Oil Prices ◽  
Saudi Arabian ◽  
Oil Price Volatility ◽  
Short Run ◽  
Oil Sector ◽  
The Impact

Saudi Arabia is a petroleum resource-rich country, and half of the GDP of Saudi Arabia is based on the Oil Sector Revenue (OSR). The OSR is governed by the Oil Prices (OP), while GDP is also affected by the OSR in petroleum exporting companies. The volatility of OP governs the OSR and GDP positively and perfectly as the oil sector contributes approximately half of the GDP of Saudi Arabia. The study analyzes the governance of the Public Spending Avenues (PSA) by the OP, OSR, and GDP in the long and short run and based on the secondary data taken from the website of the Saudi Arabian Monetary Authority (SAMA). Coefficient of Variations (CV), Chain-based Index (CBI) numbers, Fixed-based Index (FBI) numbers, and Analysis of Variances (ANOVA) of OP and other dependent variables calculated to get the normality, sensitivity, trend, and significance difference among the sensitivity and trend of variables, while Pearson’s correlations establish the cause-effect relationship among the variables. The study reveals that oil price volatility does not affect the OSR, GDP, and ultimately public spending in the long run. However, there is governance of volatility of OP that can be seen on OSR, GDP, and ultimately on PSA in the short run. Saudi Arabian government enhances its spending on PSA and especially on education while lowering the OP. There is a need to diversify the income resources to minimize the reliability of oil prices and budget deficit and consider the sensitivity of oil prices on the economy by the policymakers to formulate the policies to minimize the impact of volatility of OP on the economy. AcknowledgmentThe author would like to thank the Deanship of Scientific Research, Prince Sattam Bin Abdulaziz University, Saudi Arabia.  

scholarly journals Oil Prices and Inflation Dynamics

2017 ◽  
Vol 17 (196) ◽  
Author(s):  
Sangyup Choi ◽  
Davide Furceri ◽  
Prakash Loungani ◽  
Saurabh Mishra ◽  
Marcos Poplawski Ribeiro
Keyword(s):  
Developing Economies ◽  
Oil Prices ◽  
Oil Price ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Energy Subsidies ◽  
Percent Increase ◽  
Cross Country ◽  
The Impact ◽  
Domestic Inflation

We study the impact of fluctuations in global oil prices on domestic inflation using an unbalanced panel of 72 advanced and developing economies over the period from 1970 to 2015. We find that a 10 percent increase in global oil inflation increases, on average, domestic inflation by about 0.4 percentage point on impact, with the effect vanishing after two years and being similar between advanced and developing economies. We also find that the effect is asymmetric, with positive oil price shocks having a larger effect than negative ones. The impact of oil price shocks, however, has declined over time due in large part to a better conduct of monetary policy. We further examine the transmission channels of oil price shocks on domestic inflation during the recent decades, by making use of a monthly dataset from 2000 to 2015. The results suggest that the share of transport in the CPI basket and energy subsidies are the most robust factors in explaining cross-country variations in the effects of oil price shocks during the this period.

scholarly journals Oil Price Shocks and Fiscal Spending in Oil Producing Economy: The Role of Asymmetry

2018 ◽  
pp. 1-10
Author(s):  
Bernard Olagboyega Muse
Keyword(s):  
Crude Oil ◽  
Empirical Finding ◽  
Oil Prices ◽  
Oil Price ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Asymmetric Impact ◽  
The Impact ◽  
Fiscal Spending

Given their over reliance on proceeds from the sale of crude oil, fiscal spending in the oil-producing economy are often characterised with some specific challenges mainly due to the uncertainty in the nature of oil price movements in the international crude oil market. Motivated by the historical up – down trends in the international oil prices and their potential implications particularly for oil-producing countries, this paper explores linear and non-linear ARDL frameworks to examine the symmetric and asymmetric impact of oil price shocks on fiscal spending. Using the case of the Nigerian economy, this empirical finding suggests that shocks to international oil prices did matter for fiscal spending in the oil-producing economy. On the direction of the impact of the shocks, the finding of the non-rejection of the null hypothesis of no asymmetry thus implies that fiscal spending in Nigeria reacts indifferently to either a positive or negative oil price shocks.

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