RETRACTED: Effect of oil prices on trade balance: New insights into the cointegration relationship from Pakistan

Hassan, Syeda Anam; Zaman, Khalid

doi:10.1016/j.econmod.2012.07.006

Cited by 30 publications

(20 citation statements)

References 28 publications

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“…Using annual data for 35 primary commodities traded internationally during 1960during -2005during , Baffes (2007 argued that increases in oil prices reduce industrial production through declining disposable income. Finally, using an autoregressive distributed lags (ARDL) model, Hassan and Zaman (2012) concluded that oil price shocks reduce international trade for Pakistan.…”

Section: Oil Price Volatility Merchandise Trade Structural Shocks Vecmentioning

confidence: 99%

Estimating the effects of global oil market shocks on Australian merchandise trade

Sotoudeh

Worthington

2016

Economic Analysis and Policy

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In this paper, we examine the dynamic responses of Australian merchandise trade to global oil market structural shocks. The analysis employs monthly data over the period June 1986 to January 2013 and vector generalised autoregressive conditional heteroscedasticity (VGARCH), structural vector autoregression (SVAR), and parametric nonlinear models. We find that an increase in the oil price driven by shocks in global economic activity exerts a significant influence on Australian merchandise exports, and thereby merchandise trade as a whole, for periods of more than one year. However, the responses of merchandise imports to oil price shocks are more modest and persist for only a few months. Finally, uncertainty in future global oil prices, as measured by volatility in the 3-month-ahead price, strongly and negatively affects Australian international commodity markets.

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Section: Oil Price Volatility Merchandise Trade Structural Shocks Vecmentioning

confidence: 99%

Estimating the effects of global oil market shocks on Australian merchandise trade

Sotoudeh

Worthington

2016

Economic Analysis and Policy

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“…On the external sector front, Ozlale and Pekkurnaz () found that in the short term, an unexpected increase in oil prices causes the change in the current account ratio to fall in the Turkish economy even after controlling for output gap and exchange rate. Hassan and Zaman () documented a negative and significant relation between oil prices and trade balance both in short run and long run in the context of Pakistan's economy.…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of oil price fluctuations onIndian economy

Gupta

Goyal

2015

OPEC Energy Review

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Indian economy has been facing the twin issues of mounting trade imbalance and persisting inflation. Oil constitutes one-third of the country's total imports and is considered to have wideranging impact on its economy. This paper empirically examines how oil price fluctuations impact Indian economy through various channels, viz. real sector, monetary policy, external trade, exchange rate and investment. The results of cyclical correlation analysis suggest that oil is procyclical to output, price level, stock market, gold, interest rate and foreign exchange reserves, while it is counter-cyclical to money supply, net exports and exchange rate. Also, it is found that oil Granger causes output, general price level and net exports. The study employs vector autoregression (VAR) analysis and examines variance decomposition to capture the linear interdependencies among the variables. The structural stability tests demonstrate that there is no evidence of structural break in the VAR model, confirming the reliability of estimated relationships under the VAR model.

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“…As a result of the significance of the effects of oil prices on macroeconomic variables, many previous studies have attempted to examine the relationship among oil price, exchange rate, and trade balance. Some of these studies include Ozlale and Pekkurnaz (2010); Hassan and Zaman (2012); and Tiwari and Olayeni (2013). According Ozlale and Pekkurnaz (2010), oil price significantly affected trade balance.…”

Section: Introductionmentioning

confidence: 99%

“…According Ozlale and Pekkurnaz (2010), oil price significantly affected trade balance. On the other hand, in the area of the effects of oil price on exchange rate, while Hassan and Zaman (2012) and Tiwari and Olayeni (2013) concluded that there are negative relationships between oil price and exchange rate for India. Studies such as Olomola and Adejumo (2006) and Aliyu (2009) found a positive relationship between oil price and exchange rate for Nigeria.…”

Section: Introductionmentioning

confidence: 99%

Effects of Global Oil Price on Exchange Rate, Trade Balance, and Reserves in Nigeria: A Frequency Domain Causality Approach

Olayungbo

2019

JRFM

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This study investigated the relative Granger causal effects of oil price on exchange rate, trade balance, and foreign reserve in Nigeria. We used seasonally adjusted quarterly data from 1986Q4 to 2018Q1 to remove predictable changes in the series. Given the non-stationarity of our variables, we found cointegration to exist only between oil price and foreign reserve. The presence of cointegration implied the existence of long run relationship between the variables. The Granger causality result showed that oil price strongly Granger caused foreign reserve in the short period. However, no Granger causal relationships were found between oil price and trade balance and for oil price and exchange rate. The implication of the result is that Nigerian government should not rely solely on oil price to sustain her reserve but to diversify the economy towards non-resource production and export for foreign exchange generation.

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RETRACTED: Effect of oil prices on trade balance: New insights into the cointegration relationship from Pakistan

Cited by 30 publications

References 28 publications

Estimating the effects of global oil market shocks on Australian merchandise trade

Estimating the effects of global oil market shocks on Australian merchandise trade

Impact of oil price fluctuations onIndian economy

Effects of Global Oil Price on Exchange Rate, Trade Balance, and Reserves in Nigeria: A Frequency Domain Causality Approach

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