scholarly journals Asymmetric Pass-Through Effects of Oil Price on Economic Growth in Malaysia

2021 ◽  
Vol 22 (2) ◽  
pp. 753-764
Author(s):  
Umar Bala ◽  
Chin Lee ◽  
Rabiu Maijama’a
Keyword(s):  
Economic Growth ◽  
Oil Prices ◽  
Oil Price ◽  
Policy Implications ◽  
Asymmetric Adjustment ◽  
Policy Makers ◽  
Threshold Autoregressive ◽  
Price Increases ◽  
Pass Through ◽  
The Interest Rate

This empirical analysis intends to examine the asymmetric response of economic growth when the oil price changes in Malaysia by applying threshold autoregressive (TAR) and momentum threshold autoregressive (MTAR) cointegration and asymmetric adjustment models. The results revealed that the oil price has an asymmetric impact on Malaysian economic growth. We found that when oil price increases this accelerates economic growth; however, the speeds of adjustment back to the steady position were insignificant. When the oil price dropped, oil price significantly and negatively affects economic growth for a period of time and then returns back to its normal position. The results revealed that Malaysian economic growth constantly benefits when the oil price increases and is temporarily negatively affected when oil prices drop. The results have important policy implications. This suggests that it is essential to the policy makers to consider different policy responses for hikes and drops in oil prices. The result implies that negative oil price shock would lower economic growth, however it is temporary. Therefore, policy makers might response by implementing expansionary monetary policy to stimulate economic growth. The explanation is intuitive. For example, an increase in the money supply would normally pull down the interest rate which would further encourage consumption and investment, stimulate economic growth, which would increase oil demand and push up its price.

Oil Price—Macroeconomy Causality: Evidence from Emerging Economies

2021 ◽  
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Emerging Economies ◽  
Oil Prices ◽  
Oil Price ◽  
China And India ◽  
Cross Country

This paper investigates whether changes in oil prices could explain cross-country variations in economic growth. The sample included WANA countries, China and India. The findings indicated bidirectional oil price-economy causality in the WANA region’s oil-exporting countries. In addition, a unidirectional causality running from changing oil prices to growth was found in the WANA region. However, there was no clear oil price-economy causal relationship for non-oil WANA countries, China and India. The study recommended diversification and fuel pricing reforms to create a robust fiscal balanced and sustained economic growth.

scholarly journals Do High Oil Prices Obstruct the Transition to Renewable Energy Consumption?

2020 ◽  
Vol 12 (11) ◽  
pp. 4689 ◽  
Author(s):  
Shahriyar Mukhtarov ◽  
Jeyhun I. Mikayilov ◽  
Sugra Humbatova ◽  
Vugar Muradov
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Energy Consumption ◽  
Negative Impact ◽  
Oil Prices ◽  
Oil Price ◽  
Renewable Energy Consumption ◽  
Long Run ◽  
Carbon Dioxide Co2 ◽  
The Impact

The study analyzes the impact of economic growth, carbon dioxide (CO2) emissions, and oil price on renewable energy consumption in Azerbaijan for the data spanning from 1992 to 2015, utilizing structural time series modeling approach. Estimation results reveal that there is a long-run positive and statistically significant effect of economic growth on renewable energy consumption and a negative impact of oil price in the case of Azerbaijan, for the studied period. The negative impact of oil price on renewable energy consumption can be seen as an indication of comfort brought by the environment of higher oil prices, which delays the transition from conventional energy sources to renewable energy consumption for the studied country case. Also, we find that the effect of CO2 on renewable energy consumption is negative but statistically insignificant. The results of this article might be beneficial for policymakers and support the current literature for further research for oil-rich developing countries.

Oil prices and world inflation

2008 ◽  
Vol 203 ◽  
pp. 31-34 ◽  
Author(s):  
Ray Barrell ◽  
Olga Pomerantz
Keyword(s):  
Global Economy ◽  
Model Simulation ◽  
Oil Prices ◽  
Fourth Quarter ◽  
Oil Price ◽  
Price Increases ◽  
Inflationary Pressure ◽  
Simulation Results

Between NIESR's October 2007 and January 2008 global economy forecasts, oil prices rose by almost $20 per barrel, and they averaged $86 a barrel in the fourth quarter of 2007, as against our assumption of $71 a barrel. In the first quarter of 2008 we project that they will average $90 a barrel, $19 above the level we projected in October. Real oil prices have risen almost to the level seen in around 1980, as we can see from figure 1. There has, however, been no resurgence of inflationary pressure on the scale that was observed in the mid-1970s and early 1980s in response to oil price increases. This has been much as we anticipated, as is discussed in Barrell and Pomerantz (2004), and our model simulation results reflect the changed environment in which the increase has taken place.

scholarly journals PENGARUH HARGA MINYAK DUNIA TERHADAP PERTUMBUHAN EKONOMI, INFLASI, DAN PENGANGGURAN DI INDONESIA

2020 ◽  
Vol 7 (1) ◽  
pp. 13-24
Author(s):  
Sodik Dwi Purnomo ◽  
Istiqomah Istiqomah ◽  
Lilis Siti Badriah
Keyword(s):  
Economic Growth ◽  
Data Analysis ◽  
Standard Deviation ◽  
Inflation Rate ◽  
Vector Autoregression ◽  
Oil Prices ◽  
Positive Influence ◽  
Oil Price ◽  
Vector Autoregressive ◽  
Analysis Technique

The purpose of this research is to analyze the influence of oil prices fluctuations to Indonesia macroeconomics that is economic growth, inflation, and unemployment from 1988 to 2018. The data analysis technique uses Vector Autoregressive (VAR). The result showed that oil price fluctuations in the amount of one standard deviation will gives a positive influence to economic growth, inflation rate, and unemployment which each has 0,001 percent, 0,001 percent, and 0,002 percent.Keyword : World Oil Prices, Economic Growth, Inflation, and Unemployment Abstrak Tujuan dari penelitian ini adalah untuk mengetahui bagaimana pengaruh fluktuasi harga minyak dunia terhadap variabel makroekonomi Indonesia yaitu pertumbuhan ekonomi, inflasi, dan angka pengangguran dari tahun 1988 sampai dengan 2018. Teknik analisis data menggunaan Vector Autoregression (VAR). Hasil analisis menunjukkan bahwa guncangan yang terjadi pada fluktuasi harga minyak dunia sebesar satu standar deviasi akan memberikan pengaruh positif terhadap pertumbuhan ekonomi, inflasi serta pengangguran yaitu masing-masing sebesar 0,001 persen, 0,001 persen, dan 0,002 persen.Kata Kunci : Harga Minyak Dunia, Pertumbuhan Ekonomi, Inflasi, dan Pengangguran

scholarly journals Impact of FDI inflow, crude oil prices, and economic growth on CO2 emission in Tunisia: Symmetric and asymmetric analysis through ARDL and NARDL approach

2021 ◽  
Vol 12 (1) ◽  
pp. 1-13
Author(s):  
Tarek Ghazouani
Keyword(s):  
Economic Growth ◽  
Crude Oil ◽  
Carbon Emissions ◽  
Co2 Emission ◽  
Oil Prices ◽  
Oil Price ◽  
Crude Oil Price ◽  
Fdi Inflows ◽  
Crude Oil Prices ◽  
Long Run

This study explores the symmetric and asymmetric impact of real GDP per capita, FDI inflow, and crude oil price on CO2 emission in Tunisia for the 1972–2016 period. Using the cointegration tests, namely ARDL and NARDL bound test, the results show that the variables are associated in a long run relationship. Long run estimates from both approach confirms the validity of ECK hypothesis for Tunisia. Symmetric analysis reveals that economic growth and the price of crude oil adversely affect the environment, in contrast to FDI inflows that reduce CO2 emissions in the long run. Whereas the asymmetric analysis show that increase in crude oil price harm the environment and decrease in crude oil price have positive repercussions on the environment. The causality analysis suggests that a bilateral link exists between economic growth and carbon emissions and a one-way causality ranges from FDI inflows and crude oil prices to carbon emissions. Thus, some policy recommendations have been formulated to help Tunisia reduce carbon emissions and support economic development.

scholarly journals The Dynamics of Oil Prices in the Nigerian Construction and Economic Growth

2018 ◽  
pp. 1-19
Author(s):  
Peter Uchenna Okoye ◽  
Evelyn Ndifreke Igbo
Keyword(s):  
Economic Growth ◽  
Price Change ◽  
Oil Prices ◽  
Oil Price ◽  
National Bureau ◽  
Construction Sector ◽  
Price Fluctuation ◽  
Long Run ◽  
Long Run Equilibrium ◽  
Oil Price Fluctuation

Aims: The continuous reverberation of unstable global oil price change has caused this study to examine the effect of oil price fluctuation on the construction and economic growths in Nigeria. Study Design: Data for the analysis were extracted from different National Bureau of Statistics (NBS) publications on the construction sector and economy (GDP); and OPEC Annual Statistical Bulletin 2017 and BP Statistical Review of World Energy June 2017 on oil price from 1981 to 2016. Place and Duration of Study: The study was done in Nigeria between October 2017 and February 2018. Methodology: The study applied different econometric techniques including the Augmented Dickey-Fuller (ADF), the generalized least squares (GLS) regression (DF-GLS), and the Phillips-Perron (PP)  for unit root test; Johansen’s cointegration test and Error Correction Model (ECM) for long-run equilibrium relationship; Granger causality test for direction of causation or influence; as well as carrying different validation tests. Results: It was found that oil price fluctuation does not have any causal influence on the construction growth nor economic growth; rather it is only the economic growth that influences the construction growth without feedback. It further revealed the existence of unstable long-run equilibrium contemporaneous relationship between the variables. It showed that the deviation from the equilibrium level in the current year will be corrected by 8.8% in the following year and that it will take about 11 years and 4 months to restore the long-run equilibrium state on the economic growth should there be any shock from the construction growth and oil prices fluctuation in the system. Conclusion: The study concluded that though construction sector and general economy may be sensitive to the oil price change, their growth cannot be said to have been influenced or caused by the fluctuation in oil prices. On this strength, the subsisting oil price position in determining the economic trends in Nigeria is challenged. It then calls for new thoughts and strategies towards monitoring the oil prices and economic growth in Nigeria which may culminate in paying less attention to oil price changes and focusing more on other economic variables that trigger changes in the economy and development of Nigeria.

scholarly journals The Nexus between Agricultural Productivity, Oil Prices, Economic Growth, and Financial Development in the USA

2021 ◽  
Vol 7 (1) ◽  
pp. 117-136
Author(s):  
Turgut Tursoy ◽  
Andrea Simbarashe Rabson
Keyword(s):  
Economic Growth ◽  
Financial Crisis ◽  
Financial Development ◽  
Financial Stability ◽  
Structural Break ◽  
Agricultural Productivity ◽  
Oil Prices ◽  
Policy Implications ◽  
Series Data ◽  
Positive Effects

Purpose. The study aims to examine the nexus between agricultural productivity by connecting oil prices, economic growth, and financial development. Design/Methodology/Approach. A newly formulated ARDL model was used to estimate an agricultural productivity nexus model using annual time-series data from 1962 to 2016. Innovation and additive structural break unit root tests were applied to determine the existence of unit roots, and the results reaffirmed that all the variables were stationary at first difference. The Chow Breakpoint test was applied to confirm a structural break in the year 2008 caused by the effects of the 2008 financial crisis. Findings and Implications. The results depicted a long-run relationship linking agricultural productivity, oil prices, economic growth, financial development and a financial crisis. The results also showed that financial development and economic growth have positive effects on agricultural productivity. The empirical findings further suggested that an increase in oil prices and the prevalence of a financial crisis have severe adverse effects on agricultural productivity. Originality. The study provides a novel viewpoint of agricultural productivity by connecting oil prices, economic growth, and financial stability and development. The study successfully demonstrated that the financial sector and oil price stability are pivotal for enhancing agricultural productivity initiatives. This study highlights the policy implications of the estimated results for policymakers seeking to boost agricultural productivity by addressing economic misfortunes induced by oil shocks and a financial crisis.

scholarly journals THE IMPACT OF OIL PRICES ON INVESTMENT IN CROATIA

2021 ◽  
Vol 6 (1) ◽  
pp. 108-117
Author(s):  
Marina Lolić Čipčić ◽  
Keyword(s):  
Economic Growth ◽  
Positive Reaction ◽  
Capital Accumulation ◽  
Labour Force ◽  
Oil Prices ◽  
Oil Price ◽  
Var Analysis ◽  
Personal Consumption ◽  
Price Growth ◽  
The Impact

If we look at economic growth as a function of labour and capital then, aside from the labour force, investment is a key determinant of capital accumulation and, accordingly, a prerequisite for economic growth and prosperity. During the analysed period (1996:Q1-2015:Q4) investment in Croatia demonstrated pro-cyclically behaviour but showed a higher level of fluctuation then personal consumption or GDP. The aim of the paper is to examine the influence of oil prices on investment during the analysed period using Vector Autoregression (VAR) analysis and to determine the nature of their relationship by permuting four different oil price indicators. The results indicate that investment initially react positively to the growth of oil prices after which their reaction to oil price growth becomes negative (and more pronounced than the initial positive reaction). Contribution of oil price changes to investment fluctuations were also found. Keywords: investment, oil prices

scholarly journals Inflation Expectations and the Pass-Through of Oil Prices

2021 ◽  
pp. 1-26
Author(s):  
Knut Are Aastveit ◽  
Hilde C. Bjørnland ◽  
Jamie L. Cross
Keyword(s):  
Oil Prices ◽  
Structural Var ◽  
Oil Price ◽  
Inflation Expectations ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Demand And Supply ◽  
The Great Recession ◽  
Oil Market ◽  
Pass Through

Abstract Inflation expectations and the associated pass-through of oil price shocks depend on demand and supply conditions underlying the global oil market. We establish this result using a structural VAR model of the global oil market that jointly identifies transmissions of oil demand and supply shocks through real oil prices to both expected and actual inflation. We demonstrate that economic activity shocks have a significantly longer lasting effect on inflation expectations and actual inflation than other types of real oil price shocks, and resolve disagreements around the role of oil prices in explaining the missing deflation puzzle of the Great Recession.

scholarly journals Oil price fluctuations and economic growth: the case of MENA countries

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mamdouh Abdelmoula Mohamed Abdelsalam
Keyword(s):  
Economic Growth ◽  
Linear Models ◽  
Oil Prices ◽  
Oil Price ◽  
Price Changes ◽  
Content Type ◽  
Price Fluctuations ◽  
Mena Countries ◽  
Negative Effect ◽  
The Impact

Purpose This paper aims to explore the extreme effect of crude oil price fluctuations and its volatility on the economic growth of Middle East and North Africa (MENA) countries. It also investigates the asymmetric and dynamic relationship between oil price and economic growth. Further, a separate analysis for each MENA oil-export and oil-import countries is conducted. Furthermore, it studies to what extent the quality of institutions will change the effect of oil price fluctuations on economic growth. Design/methodology/approach As the effect of oil price fluctuations is not the same over different business cycles or oil price levels, the paper uses a panel quantile regression approach with other linear models such as fixed effects, random effects and panel generalized method of moments. The panel quantile methodology is an extension of traditional linear models and it has the advantage of exploring the relationship over the different quantiles of the whole distribution. Findings The paper can summarize results as following: changes in oil price and its volatility have an opposite effect for each oil-export and oil-import countries; for the former, changes in oil prices have a positive impact but the volatility a negative effect. While for the latter, changes in oil prices have a negative effect but volatility a positive effect. Further, the impact of oil price changes and their uncertainty are different across different quantiles. Furthermore, there is evidence about the asymmetric effect of the oil price changes on economic growth. Finally, accounting for institutional quality led to a reduction in the impact of oil price changes on economic growth. Originality/value The study concludes more detailed results on the impact of oil prices on gross domestic product growth. Thus, it can be used as a decision-support tool for policymakers.

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