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Oil price volatility and macroeconomy: Tales from top two oil producing economies in Africa

Journal of Economic & Financial Studies

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Field Value
 
Title Oil price volatility and macroeconomy: Tales from top two oil producing economies in Africa
 
Creator Eagle, Beyond
 
Subject —
E(GRACH); Granger causality; Macroeconomic performance; Oil Price Volatility.
E6; E30, E31; L2.
 
Description This study examines the relationship between oil price volatility and macroeconomic performance in two top net oil exporting countries in Africa (Angola and Nigeria) using quarterly data from International Monetary Fund, Central Bank of Nigeria and Angola were used to carry out the empirical analysis. Using structural Vector Autoregressive Model (SVAR), E(GARCH) and Granger Causality test results shows that oil price volatility has marginal impact on growth rate of GDP in both countries. Both impulse response function and variance decomposition shows that shocks to exchange rate from oil price volatility was the highest i.e. exchange rate appreciates when oil price increases and depreciates when oil price reduces. The Granger causality test shows that the direction of causality between oil price volatility and macroeconomic variables in Nigeria was bi-directional while the relationship in Angola was unidirectional. Hence, both countries (Angola and Nigeria) should improve upon the refining capacity of their crude oil. Also, economic diversification should be strengthening to promote indigenous production to reduce importation of those goods that could be endogenously produced
 
Publisher LAR Center Press
 
Contributor —
 
Date 2017-09-16
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://journalofeconomics.org/index.php/site/article/view/283
10.18533/jefs.v5i04.283
 
Source Journal of Economic & Financial Studies; Vol 5, No 04 (2017): August; 45-55
2379-9471
2379-9463
 
Language eng
 
Relation http://journalofeconomics.org/index.php/site/article/view/283/329
 
Rights Copyright (c) 2017 Beyond Eagle
http://creativecommons.org/licenses/by/4.0