Asymmetric Oil Price and Inflation: Evidence from Net Oil Exporting Countries in Africa
Year: 2020
Type: article
Abstract: This paper explores the Pooled Mean Group Estimation piloted by Pesaran et al (1999) to examine the impact of asymmetric oil price on inflation in selected net oil exporting countries in Africa. This technique permits us to gauge the influence of oil price volatility on inflation, and also able to capture possible asymmetric adjustment of the inflation towards to its long-run equilibrium. The findings suggest that both positive and negative oil price changes (?=0.0409; p=0.849 and ?=0.3763; p=0.065 respectively) had an insignificant positive effect on inflation on the Africa net oil-exporting countries. The study concluded that oil price changes had an insignificant impact on inflation in the Africa net oil-exporting countriesin the long run but seems to be diverse in the short-run. This, however, may not be unconnected with the role of fiscal policy measures institutionalized by the respective government of the selected Africa’s net oil exporting countries as revealed in the findings. The paper offers thateach of the selected Africa’s net oil exporting countries should expand their consumption expenditure and develop their manufacturing export capability in order to inspire domestic production of quality food in large quantity considering the fact that it can be used as counteractive measure against inflation.
Authors: Emmanuel George, Jimoh Sina Ogede
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W3093806909