Next Article in Journal
Wind Turbine Multi-Fault Detection and Classification Based on SCADA Data
Next Article in Special Issue
Strategic Corporate Social Responsibility, Sustainable Growth, and Energy Policy in China
Previous Article in Journal
Crop Characteristics of Aquatic Macrophytes for Use as a Substrate in Anaerobic Digestion Plants—A Study from Germany
Previous Article in Special Issue
Oil Prices and Global Stock Markets: A Time-Varying Causality-In-Mean and Causality-in-Variance Analysis
Article Menu

Export Article

Open AccessArticle
Energies 2018, 11(11), 3017; https://doi.org/10.3390/en11113017

Asymmetric Impacts of Oil Price on Inflation: An Empirical Study of African OPEC Member Countries

1,2
and
2,*
1
Department of Economics, Faculty of Management and Social Sciences, Bauchi State University, P.M.B. 65 Gadau, Nigeria
2
Department of Economics, Faculty of Economics and Management, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor Darul Ehsan, Malaysia
*
Author to whom correspondence should be addressed.
Received: 14 August 2018 / Revised: 15 October 2018 / Accepted: 26 October 2018 / Published: 2 November 2018
(This article belongs to the Special Issue Energy Markets and Economics)
Full-Text   |   PDF [997 KB, uploaded 2 November 2018]   |  

Abstract

This study investigates the asymmetric impacts of oil price changes on inflation in Algeria, Angola, Libya, and Nigeria. Three different kinds of oil price data were applied in this study: the actual spot oil price of individual countries, the OPEC reference basket oil price, and an average of the Brent, WTI, and Dubai oil price. Autoregressive distributed lag (ARDL) dynamic panels were used to estimate the short- and long-term impacts. Also, we partitioned the oil price into positive and negative changes to capture asymmetric impacts and found that both the positive and negative oil price changes positively influenced inflation. However, the impact was found to be more significant when the oil prices dropped. We also found that the money supply, the exchange rate, and the gross domestic product (GDP) are positively related to inflation, while food production is negatively related to inflation. Accordingly, policy-makers should be cautious when formulating policies between the positive and negative changes in oil prices, as it was shown that inflation increased when the oil price dropped. Additionally, the use of a contractionary monetary policy would help to reduce the inflation rate. Lastly, we suggest that the government should encourage domestic food production, both in quantity and quality, to reduce inflation. View Full-Text
Keywords: oil price; food production; inflation; asymmetric; Algeria; Angola; Libya; Nigeria oil price; food production; inflation; asymmetric; Algeria; Angola; Libya; Nigeria
Figures

Figure 1

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
SciFeed

Share & Cite This Article

MDPI and ACS Style

Bala, U.; Chin, L. Asymmetric Impacts of Oil Price on Inflation: An Empirical Study of African OPEC Member Countries. Energies 2018, 11, 3017.

Show more citation formats Show less citations formats

Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Related Articles

Article Metrics

Article Access Statistics

1

Comments

[Return to top]
Energies EISSN 1996-1073 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
Back to Top