Revisit of Tunisia’s Money Demand Function: What About Oil Price and Exchange Rate Effects?

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.

Section: Resultsmentioning

confidence: 87%

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

Cevallos-Mina,

Lara-Tambaco,

Reyes-Vera

et al. 2024

“…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

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.

“…However, oil exporting countries benefit from high oil prices (Tuzova and Qayum, 2016;Abdelsalam, 2023;Bagadeem, 2023;Neifar and Kammoun, 2022). For them, although oil shocks positively impact economic growth, the negative impact can be very large.…”

Section: Literature Reviewmentioning

confidence: 99%

Central Bank Independence and Oil Prices Impact on Macroeconomic Indicators

Mukhamediyev,

Zhamanbayev,

Mukhamediyeva

2024

The central bank's independence and oil prices can influence macroeconomic indicators. Many articles are devoted to studying their influence on individual macroeconomic indicators. As it turned out, the study's results depend on the sample of countries and the interval. They can lead to contradictory conclusions: from a negative or positive effect to its complete absence. However, these issues have not been sufficiently studied for post-Soviet countries with peculiarities in their past development. This study examines the impact of central bank independence (CBI) and oil prices on economic growth, inflation, and income inequality in post-Soviet and developed countries from 2001 to 2020. Based on the analysis of panel data, it was found that strengthening the independence of central banks does not significantly impact economic growth, inflation, and income inequality in developed countries but contributes to their reduction in post-Soviet countries. Higher oil prices reduce economic growth and increase income inequality in developed countries and reduce economic growth, but do not affect income inequality in post-Soviet countries. An increase in oil price increments increases inflation in both samples of countries. The results of this study may be useful for developing macroeconomic policies.