Economic Impacts of Oil Price Fluctuations in Developed and Developing Economies

Taghizadeh–Hesary, Farhad; Yoshino, Naoyuki; Assari-Arani, Abbas

doi:10.1007/978-4-431-55797-5_5

Cited by 6 publications

(2 citation statements)

References 6 publications

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“…However, the drastic contraction of global oil demand in recent times is the first after the global financial crisis of 2007-2009. On the supply side, the inability of the Organization of the Petroleum Exporting Countries (OPEC) to cut production as proposed during their meeting on the 5 th of March, 2020, aggravated the plunge in oil price to about $31.1 per barrel (WTI) on the 9 th of March 2020 and further declined to $11.57 per barrel (WTI) by the 21 st of April 2020 due to the impact of the COVID-19 pandemic [51], [65]. Oil price fluctuations are crucial to the global economy since oil serves as the primary energy source and raw materials for several industries [38].…”

Section: Introductionmentioning

confidence: 99%

An Analysis of Declining Oil Revenue Implications on Oil-Exporting Countries: An ARDL Bound Test Approach for Nigeria and Venezuela.

2023

European Economic Letters

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This study is a comparative analysis of declining oil revenue implications on oil-exporting countries, the case of highly oil-dependent nations; Nigeria (West Africa) and Venezuela (South America). The Autoregressive Distributed Lag (ARDL) Bound Test Approach was employed for the estimation of the parameters of the model. Yearly time series data for 40 years were employed for the empirical analyses. However, the unit root tests were first carried out using the Augmented Dickey-Fuller (ADF) and Philips Peron's (PP) Tests. The Unit Root results indicate that all the variables of the model are stationary at level I(0) and at first difference I(1). This outcome was the basis for the choice of the ARDL estimation technique for the analyses. Contrary to expectation, the findings for both Nigeria and Venezuela reveal that government expenditure increases for a per cent decline in oil price. The findings further reveal that the increasing expenditures in both economies are financed mainly through borrowing and seigniorage. The results also show that there is a substantial decline in government revenues of both countries for a per cent decline in oil price. It however, shows that these nations are overwhelmingly relying on oil exports for the nations' sustainability. Given the above findings, it is highly recommended that both Nigeria and Venezuela diversify their revenue base, develop other sectors of the economies since the nations are endowed with other natural resources aside from oil, and restore security which would help in attracting foreign investors and ensure effective management of government funds. However, an economic model has been proposed to help in closing the revenue gaps in these highly oil-dependent nations.

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Section: Introductionmentioning

confidence: 99%

An Analysis of Declining Oil Revenue Implications on Oil-Exporting Countries: An ARDL Bound Test Approach for Nigeria and Venezuela.

2023

European Economic Letters

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“…The significance of oil price shocks on macroeconomic variables in oil-exporting and importing countries has continued to be a critical area of interest for scholars and experts (Hamilton, 1983;Śmiech, Papież, Rubaszek & Snarska, 2021;Caldara, Cavallo & Iacoviello, 2019;Taghizadeh-Hesary, Yoshino & Assari-Arani, 2016). Hamilton (1983) initiated this inquiry by analyzing the influence of crude oil price hikes on the United States recession.…”

Section: Introductionmentioning

confidence: 99%

Comparative Analysis of the Impact of Oil Price Shocks on Selected Macroeconomic Variables in Angola and Libya

Abayomi,

Obumneke,

Nwafor

et al. 2023

AJE

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Purpose: This study comparatively examines the impact of oil price shocks on five selected macroeconomic variables in two African oil-producing countries, Angola and Libya, using secondary data from 1983 to 2021. Materials and Methods: We adopted a causal-comparative/Quasi-Experimental research design to infer cause-and-effect relationships. The structural vector error correction model (SVECM) was employed due to the advantage of cointegrated variables in both countries. Findings: The empirical analysis reveals that the response to and significance of oil price shocks are somewhat similar in the two countries, with a significant positive and persistent effect on oil prices and real economic output. However, other macro variables responded insignificantly to oil price shocks, albeit with varying signs. Based on the empirical analysis, we conclude that while oil price shocks have a significant and lasting positive impact on oil prices and real economic output in both countries studied, their influence on other macroeconomic variables is relatively insignificant, though these variables exhibit varying responses. Hence, to mitigate the risks associated with oil price shocks and reduce dependency on oil revenues, we recommend that Angola and Libya diversify their economies by investing in non-oil sectors such as agriculture, manufacturing, tourism, and renewable energy. Implications to Theory, Practice and Policy: Furthermore, we recommend the implementation of macroeconomic stabilization policies to reduce vulnerability to oil price shocks. Fiscal measures, such as establishing sovereign wealth funds to save excess oil revenues during high oil price periods, can stabilize the economy during low oil price periods. Monetary policies, including interest rate adjustments, can counteract inflationary or deflationary pressures resulting from oil price shocks.

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Monetary policy and oil price fluctuations following the subprime mortgage crisis

Yoshino

Hesary

2014

IJMEF

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Economic Impacts of Oil Price Fluctuations in Developed and Developing Economies

Cited by 6 publications

References 6 publications

An Analysis of Declining Oil Revenue Implications on Oil-Exporting Countries: An ARDL Bound Test Approach for Nigeria and Venezuela.

An Analysis of Declining Oil Revenue Implications on Oil-Exporting Countries: An ARDL Bound Test Approach for Nigeria and Venezuela.

Comparative Analysis of the Impact of Oil Price Shocks on Selected Macroeconomic Variables in Angola and Libya

Monetary policy and oil price fluctuations following the subprime mortgage crisis

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