scholarly journals The Comparative Advantage of Crude Oil in the Top 10 Oil-Producing Countries

2019 ◽  
Author(s):  
Osama Elsalih ◽  
Kamil Sertoğlu ◽  
Mustafa Besim ◽  
Abdelhakim Embaya
Keyword(s):  
Crude Oil ◽  
Comparative Advantage ◽  
Oil Production ◽  
Panel Estimation ◽  
Crude Oil Price ◽  
Panel Ardl ◽  
Long Run ◽  
Crude Oil Production ◽  
The Usa ◽  
Short Run

This paper investigates the comparative advantage of crude oil in the top 10 oil-producing countries through computing the Normalized Revealed Comparative Advantage (NRCA) index and further examines the determinants of this advantage using panel estimation technique. The results of the NRCA index showed that during the study period of 27 years (1990-2016) not all the top10 oil-producing countries have a comparative advantage in crude oil production. Countries like Iran, Iraq, Kuwait, Russia, Saudi, and UAE are found to have a comparative advantage in producing crude oil, while countries like Brazil, China, and the USA have no comparative advantage in producing crude oil. For Canada, its comparative advantage is only revealed just between 2006 and 2016. The result of the Panel ARDL suggested that in the long run, crude oil price (COP) and daily average of crude oil production (DAP) are found to be positive and significantly related to NRCA, whereas proven reserve (PR) and domestic demand for oil (DDO) are negative and significantly related to NRCA. In the short run, COP, ADP, and DDO have the same effect as in the long run and significantly related to NRCA, while PR is statistically insignificant. Finally, a bidirectional Granger-causality is detected between the variables except for the PR and NRCA where a unidirectional causality runs from PR to NRCA.

scholarly journals Econometric Analysis of Determinants of Real Effective Exchange Rate in Nigeria (1960-2015)

2016 ◽  
Vol 9 (1) ◽  
pp. 62-80 ◽  
Author(s):  
Waheed Ibrahim
Keyword(s):  
Exchange Rate ◽  
Crude Oil ◽  
Terms Of Trade ◽  
Oil Price ◽  
Real Effective Exchange Rate ◽  
Crude Oil Price ◽  
Long Run ◽  
Effective Exchange ◽  
Short Run ◽  
Effective Exchange Rate

Abstract This study investigates the determinants of real effective exchange rate in Nigeria for the period between 1960 and 2015 using the vector error correction mechanism to separate long run from the short run fundamentals. The findings from the regression estimates revealed that; terms of trade, openness of the economy, net capital inflow and total government expenditure were the major long run determinants of real effective exchange rate in the country while variables such as; broad money supply (M2), nominal effective exchange rate, structural adjustment program dummy, June 12 crisis and change to civil rule dummies were revealed as the major short run determinants of exchange rate in Nigeria between 1960 and 2015. The study concludes by recommending that since the major variable of terms of trade (crude oil price) is out of the government control, the effect of shocks due to the fluctuations of crude oil price can be minimized by shifting the economy from a mono-product nation and diversify the economy to increase productive capacity. Also, the change to civil rule dummy used in the study revealed that the system has not been friendly with the country’s real effective exchange rate, thus needing to review the system and bringing out all negative activities there in to ensure Nigeria’s currency appreciation. Guided openness is also suggested to avert the danger that unguided trade liberalization may bring into the country.

Some dynamic macroeconomic perspectives for India’s economic growth

2020 ◽  
Vol 12 (4) ◽  
pp. 641-658
Author(s):  
Matiur Rahman ◽  
Anisul Islam
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Crude Oil ◽  
Real Effective Exchange Rate ◽  
Crude Oil Price ◽  
Content Type ◽  
Long Run ◽  
Effective Exchange ◽  
Short Run ◽  
Effective Exchange Rate

Purpose The purpose of this paper is to study impacts of changes in crude oil price, money supply, fiscal deficit and effective exchange rate on India’s economic growth (expressing all variables in real term). Design/methodology/approach First, a simple macroeconomic model is formulated to this effect. Next, linear autoregressive distributed lag procedure and vector error-correction model are applied for growth empirics. Annual data are used from 1977 through 2015. Findings Rises in real crude oil price and monetized real fiscal deficits have negative short-run and long-run effects on real economic growth. Increase in real money supply and real effective exchange rate appreciation helps promote real economic growth in both short run and long run. In all cases, there is evidence of net interactive positive feedback effects among the variables in the short run. Real effective exchange rate appreciation dampens exports, but it is helpful to imports of capital goods and crude oil that contribute to economic growth. So, the net effect on the economy may be conjecturally positive. Originality/value To the best of the authors’ knowledge, this paper is unique because of the formulation of macro-economic model pertaining to the topic and its subsequent empirical verification. Moreover, this paper seems more comprehensive than some other studies, cited in the literature review.

scholarly journals A Markov-switching dynamic regression analysis of the asymmetries related to the determinants of US crude oil production between 1982 and 2019

2021 ◽  
Author(s):  
Serge Djoudji Temkeng ◽  
Achille Dargaud Fofack
Keyword(s):  
Crude Oil ◽  
Markov Switching ◽  
Oil Production ◽  
The Other ◽  
Shale Oil ◽  
Relative Importance ◽  
Crude Oil Production ◽  
The Usa ◽  
Switching Dynamic ◽  
The Relationship

AbstractThe structural changes brought about by shale oil revolution have inspired this paper of which the aim is to analyze the potential asymmetries related to the determinants of crude oil production in the USA. Thus, using a Markov-switching dynamic regression model in which parameters change when oil production moves from one regime to the other, it is found that for both oil production and oil relative importance, the regime that was dominant during the 1980s and the early 1990s when oil production in the USA was substantially high is the same regime that has once again become dominant in the decade corresponding to the shale oil revolution. Furthermore, the study reveals the existence of asymmetries in the relationship between US crude oil production and both manufacturing production and the consumer price index. Asymmetries are also found in the relationship between the relative importance US crude oil and manufacturing production. Finally, it is found that the intercept and the variance parameter also vary from one regime to the other, thus justifying the use of regime-dependent models.

scholarly journals Investigating the Asymmetry Effects of Crude Oil Price on Renewable Energy Consumption in the United States

2021 ◽  
Author(s):  
Pritish Sahu ◽  
Sakiru Adebola Solarin ◽  
Usama Al-mulali ◽  
Ilhan Ozturk
Keyword(s):  
Renewable Energy ◽  
Crude Oil ◽  
Energy Use ◽  
Oil Prices ◽  
The United States ◽  
Oil Price ◽  
Crude Oil Price ◽  
Renewable Energy Consumption ◽  
Long Run ◽  
Short Run

Abstract The reduction in oil prices might make crude oil a cheaper alternative to renewable energy. Given this, the present paper examines the effect of fluctuation of oil prices on the use of renewable energy in the United States during the period 1970–2019. We constructed two nonlinear Autoregressive Distributed Lag (NARDL) models to examine the effect of the positive and negative oil prices shocks on the use of renewable energy in the US. The renewable energy consumption is taken as the dependent variable and GDP, Brent crude prices, population density, trade openness and price index as independent variables. The result revealed that the rise in crude oil price, GDP and population density will increase renewable energy use in the short run and in the long run as well. Moreover, the study finds that any decrease in oil prices will decrease renewable energy use in the short run and its effect will eventually diminish in the long run.

scholarly journals Managing a Country’s Sustainabilty - The Case of Malaysia and Indonesia Public Debt

2019 ◽  
Vol 10 (5) ◽  
pp. 19
Author(s):  
Abdul Razak Abdul Hadi ◽  
Tasya Aspiranti ◽  
Tahir Iqbal ◽  
Raja Rehan
Keyword(s):  
Crude Oil ◽  
Interest Rates ◽  
Oil Price ◽  
Crude Oil Price ◽  
Ardl Model ◽  
Explanatory Variables ◽  
Indonesian Government ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run

The study is driven by the motivation to examine the effects of policy interest rates and crude oil prices on Malaysian and Indonesian government borrowing within the framework of Keynesian macroeconomic theory. Using Autoregressive Distributed Lag (ARDL) model as an estimation tool over the observed period from March 2013 till June 2018, the study uncovers the absence of long-term equilibrium relationship between government borrowings and the two explanatory variables. However, based upon Error Correction Representation via ARDL model, there is a significant long-run relation (at 10% level) between Indonesian government borrowing and the two tested variables. Interestingly, this is not the case for Malaysia over both long-run and short-run relations. With respect to the short-run dynamics, there is a unidirectional causality running from crude oil price to Indonesian government borrowing. It seems crude oil price plays a significant role in influencing Indonesian government’s choice of public financing. As expected, the short-term policy rate has no significant bearing on government borrowings at all.

scholarly journals The Impact of Macroeconomic Indicators on Indian Stock Prices: An Empirical Analysis

2017 ◽  
Vol 12 (1) ◽  
pp. 61-78 ◽  
Author(s):  
A. K. Giri ◽  
Pooja Joshi
Keyword(s):  
Economic Growth ◽  
Crude Oil ◽  
Stock Prices ◽  
Stock Price ◽  
Variance Decomposition ◽  
Oil Price ◽  
Crude Oil Price ◽  
Long Run ◽  
Short Run ◽  
The Impact

AbstractThe purpose of the present study is to examine the long run and the short run relationship between stock price and a set of macroeconomic variables for Indian economy using annual data from 1979 to 2014. The long run relationship is examined by implementing the ARDL bounds testing approach to co-integration. VECM method is used to test the short and long run causality and variance decomposition is used to predict long run exogenous shocks of the variables. The results confirm a long run relationship among the variables. Evidence suggests that Economic growth, inflation and exchange rate influence stock prices positively. However, crude oil price influences the stock price negatively. This implies that the increase in oil price induces inflationary expectation in the mind of investors and hence stock prices are adversely affected. The VECM result indicates that short run and long run unidirectional causality running from economic growth and FDI to stock prices in India. The result of the variance decomposition shows that stock market development in India is mostly explained by its own shocks. The Government can take steps to control the crude oil price in India and Investors’ confidence has to be gained by boosting the economic growth of the economy through appropriate policy tools.

A dynamic relationship between crude oil price and Indian equity market: an empirical study with special reference to Indian benchmark index Sensex

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nikhil Yadav ◽  
Priyanka Tandon ◽  
Ravindra Tripathi ◽  
Rajesh Kumar Shastri
Keyword(s):  
Crude Oil ◽  
Serial Correlation ◽  
Oil Prices ◽  
Crude Oil Price ◽  
Content Type ◽  
Dynamic Relationship ◽  
Crude Oil Prices ◽  
Long Run ◽  
Short Run ◽  
Indian Stock Market

PurposeThe purpose of the study is to investigate the long-run and short-run dynamic relationship between crude oil prices and the movement of Sensex for the period of 2000–2018.Design/methodology/approachThe study uses the augmented Dickey–Fuller test for the presence of unit root, Johansen cointegration test for estimating the cointegration among the variables. Further, in the case of no cointegration found, the study employed the vector autoregression (VAR) model to estimate the long-run relationship and the Granger causality/Wald test for short-run relationship. The study also conducted tests for the prerequisites of the model: serial correlation, heteroskedasticity and normality of data.FindingsThe study found that both the variables, crude oil prices and Sensex are integrated of order 1, that is, I (1), and there is no cointegration between them. Further, the results proliferated from the VAR model unfold the marked effect of previous month crude oil prices (lag 1) on the movement of Indian stock market represented by Sensex considered as the benchmark index. Furthermore, VAR–Granger causality/block exogeneity Wald tests results indicated that there is a causal relationship between the crude oil prices and Sensex under the VAR environment. The model does not have any serial correlation and heteroskedasticity indicating toward the unbiased and robust estimates.Research limitations/implicationsThe study is conducted till the year 2018, and data for the present period (post-2018) is excluded due to ongoing trade issues between the USA and oil-exporting countries such as Iran. The current COVID-19 outbreak has also put serious issues. Due to limited time and availability of standardized data, researchers have considered Sensex as equity index only, but for more generalized research outcome few other equity indexes could have been taken for study.Originality/valueThe study is completely original in nature and is an extensive study of the relationship between the crude oil price and Indian stock market with reference to causality between the variables.

scholarly journals Food versus crude oil: what do prices tell us? Evidence from China

2015 ◽  
Vol 7 (3) ◽  
pp. 435-447 ◽  
Author(s):  
Yumeng Wang ◽  
Shuoli Zhao ◽  
Zhihai Yang ◽  
Donald J. Liu
Keyword(s):  
Crude Oil ◽  
Error Correction ◽  
Food Prices ◽  
Oil Price ◽  
Price Transmission ◽  
Crude Oil Price ◽  
Content Type ◽  
Long Run ◽  
Short Run ◽  
Price Relationship

Purpose – The purpose of this paper is to investigate the causal relationship between the prices of rice, crude oil, wheat, corn and soybean in China and estimate the long-run and short-run price relationships. Design/methodology/approach – Using monthly price date over the period of January 1998-December 2013 in China, this paper employs an autoregressive distributed lag (ARDL) bounds test to explore the cointegration relationship among the price variables and estimate the ARDL long-run price relationship and the short-run error correction process (ARDL-EC). Findings – The empirical results indicate that crude oil, as one of the forcing variables along with wheat, corn, and soybean prices, is effecting rice price in China. Both the long-run and short-run price transmission elasticity estimates suggest the importance of crude oil price on the formation of rice prices. Furthermore, the adjustment speed coefficient is found to be statistically significant, supporting the notion that there is an error correction mechanism for maintaining the long-run price relationship facing short-run shocks. Originality/value – This paper adopts four types of commodity food prices to explore the relationships with crude oil price. The evidence of market integration, including the degree of price transmission and the speed of adjustment, remains a crucial step to proceed with the government intervention.

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