Measuring the Impact of Oil Prices and Exchange Rate Shocks on Inflation: Evidence from India

Sharma, Akhil; Rishad, Abdul; Gupta, Sanjeev

doi:10.17015/ejbe.2019.024.03

Cited by 8 publications

(6 citation statements)

References 55 publications

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“…This phenomenon can be explained by the theory of "Effective Wealth", which suggests that an increase in oil prices can increase the wealth of oil-producing countries, stimulating investment and financial transactions (Hamilton, 1983). In addition, the literature highlights the influence of oil revenues on the financial system and investment, supporting the idea that changes in the price of oil can affect financial activity (Kilian and Park, 2009;Tala and Hlongwane, 2023;Sharma and Dahiya, 2023;Neifar and Kammoun, 2022).…”

Section: Resultsmentioning

confidence: 88%

The Effects of Oil Price on Energy Production and the Ecuadorian Economy

Cevallos-Mina,

Lara-Tambaco,

Reyes-Vera

et al. 2024

IJEEP

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Through an empirical analysis of the impact of variations in the international price of oil on the economic production of different strategic sectors and on energy production from various sources in Ecuador, the study seeks to show evidence on the economic effects of the price of oil. in a Latin American economy strongly linked to oil production. For this, relevant data were collected on production in different economic sectors, on the type of ownership in oil production and on energy production in various energy sources in Ecuador and statistical analyzes were carried out to evaluate the relationships between these and the international oil price. The results indicate that the effect of the oil price varies between the economic sectors of Ecuador. Some sectors, such as financial services and construction, show positive responses, while others, such as agriculture and fishing, appear less affected. The oil and mining sector in Ecuador is strongly linked to variations in the price of oil. The positive and significant response of the Oil and Mines GDP underlines the sensitivity of this sector to changes in international prices. Furthermore, energy production in Ecuador exhibits heterogeneous responses to variations in the price of oil. Forms of energy such as wind, solar, and thermal energy show positive and significant responses, while hydropower presents a negative response in some periods. Positive responses in forms of energy such as wind, solar, and thermal may indicate that the increase in the price of oil positively influences investment decisions in these energy sources. The study provides a significant contribution to the field of energy economics in oil-exporting countries and, particularly, in developing countries, as well as highlights the importance of energy diversification for these types of economies.

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Section: Resultsmentioning

confidence: 88%

The Effects of Oil Price on Energy Production and the Ecuadorian Economy

Cevallos-Mina,

Lara-Tambaco,

Reyes-Vera

et al. 2024

IJEEP

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“…This resonates with the argument that as a result of the oil dependent nature of GCC states, their economies become very sensitive to oil price fluctuations (Maghyereh et al, 2020;Jawadi and Ftiti, 2019; Gray 2011). To clearly highlight similar studies on the GCC region, other studies have also studied the relationship of oil price fluctuations on GDP growth and on income sustainability as well as other impacts of oil price on microeconomic variables of a country (Murshed et al, 2020;Chang et al, 2020;Tala and Hlongwane, 2023;Balcilar et al, 2019;Badeeb and Lean, 2018;Basher et al, 2018;Neifar and Kammoun, 2022;Sharma and Dahiya, 2023;Salisu and Oloko, 2015;Musa 2010). In another related study Nasir et al, (2019) revealed the impact of oil price on macroeconomic variables in GCC member countries between 1980-2016. the studies mentioned above observed a heterogenous response of GCC member countries on oil price shocks.…”

Section: Review Of the Literaturementioning

confidence: 99%

Oil Price Fluctuation and their Impact on the Macroeconomic Variables: The Case of Kuwait

Alawadhi,

Longe

2024

IJEEP

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The fluctuations in the international prices of crude oil have been a major concern for many economies who depend mainly on oil exports. Oil price shocks are a major disturbance for the economies of oil producing countries. This study investigates the impact of oil price shocks on selected macroeconomic variables in Kuwait using secondary data covering the period of 2001 to 2022. The study adopted the Vector autoregression (VAR) method to analyze the response of Kuwait macroeconomic variables to shocks in oil prices. Oil price in the study is considered in 2 categories: the linear oil price and the non-linear oil price (positive and negative changes in oil price). Based on the findings, it is observed that oil price shocks significantly impact macroeconomic variables in Kuwait. It is found that positive changes in oil prices have a more positive and significant impact on the macroeconomic variables compared to the negative changes in oil price. It is however concluded that there is a need for more policy developments to better harness periods of positive oil price experiences, and develop hedging risk framework for periods of negative changes in oil price in order to curb the impact of oil price shocks on Kuwait’s macroeconomy.

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“…The primary goal of the study is to estimate how variables affect oil prices using a quarterly data set for all variables from 2011 to 2021. Sharma & et al (2019) [5] it was argued that the passthrough effect of the oil price and exchange rate on economic activity, particularly in developing economies, presents policymakers with a nightmare at all times. In energy-dependent economies, exchange rate and oil price fluctuations have a significant impact on economic expansion and inflation, ultimately destabilizing the monetary and financial system of the economy."…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of changes in global crude oil prices on the Indian economy

Meena¹

2023

Int. J. Finance Manage. Econ.

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Oil is a crucial component in nearly every country's economic activities. "As a result, an increase in its price is likely to have a negative impact on the economic expansion of oil-importing nations like India. The purpose of this paper is to investigate how the price of oil affects India's economic growth to see if there is a co-integration relationship between India's economic growth, oil price, capital formation, and inflation. Crude oil always has a lower starting price, but import taxes make it more expensive for the average person. The cost of petroleum or other related items increments as needs be which brings about an expansion in consumption of an everyday person. This paper attempts to explain the significance of reducing crude oil imports to raise a person's standard of living and provides insight into the current state of crude oil imports. In order to avoid a rise in oil prices and its subsequent negative impact on the country's economic growth, the study suggests that the government should refrain from imposing additional taxes."

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Measuring the Impact of Oil Prices and Exchange Rate Shocks on Inflation: Evidence from India

Cited by 8 publications

References 55 publications

The Effects of Oil Price on Energy Production and the Ecuadorian Economy

The Effects of Oil Price on Energy Production and the Ecuadorian Economy

Oil Price Fluctuation and their Impact on the Macroeconomic Variables: The Case of Kuwait

Impact of changes in global crude oil prices on the Indian economy

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