Investigating the Pass-Through Effect of Global Oil Price Shock on Domestic Inflation in Selected African Countries
The large-scale war between Russia and Ukraine has increased global oil prices, signaling a new era of macroeconomic shock management for both developed and developing countries. Consequently, this study investigates the passthrough effect of oil prices on domestic inflation in selected African coun...
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| Format: | Article |
| Language: | English |
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The Institute of Economics, Zagreb
2024-01-01
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| Series: | Croatian Economic Survey |
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| Online Access: | https://hrcak.srce.hr/file/472280 |
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| author | Lukman O. Oyelami Babatunde S. Adekunle Ademisola M. Oluwakemi |
| author_facet | Lukman O. Oyelami Babatunde S. Adekunle Ademisola M. Oluwakemi |
| author_sort | Lukman O. Oyelami |
| collection | DOAJ |
| description | The large-scale war between Russia and Ukraine has increased global oil prices, signaling a new era of macroeconomic shock management for both developed and developing countries. Consequently, this study investigates the passthrough effect of oil prices on domestic inflation in selected African countries in a single estimation framework using the global vector autoregressive (GVAR) estimation technique. To achieve the objective of this study, country-specific data were gathered from twenty-one African countries and four foreign countries selected based on trade relations. The results from our estimation demonstrate that the domestic general price level in African countries responds to global oil price shocks. Also, like any other part of the world, a disparity-like response is observable for African countries. This is tightly connected to whether the country is a metal-resource-rich, non-rich resource, or oil-rich country. The study thus concludes that positive shocks in the global price of crude oil will worsen the delicate position of the domestic general price level in non-oil-producing African countries. Efforts to minimize the impact of international oil shocks in these countries should center around investment in renewable energy and stabilization of the economy’s supply side through proactive and effective macroeconomic management. |
| format | Article |
| id | doaj-art-91c7632c0872403a849ebcc75fcc9307 |
| institution | Kabale University |
| issn | 1330-4860 1846-3878 |
| language | English |
| publishDate | 2024-01-01 |
| publisher | The Institute of Economics, Zagreb |
| record_format | Article |
| series | Croatian Economic Survey |
| spelling | doaj-art-91c7632c0872403a849ebcc75fcc93072025-01-13T12:19:22ZengThe Institute of Economics, ZagrebCroatian Economic Survey1330-48601846-38782024-01-01262416110.15179/ces.26.2.2Investigating the Pass-Through Effect of Global Oil Price Shock on Domestic Inflation in Selected African CountriesLukman O. Oyelami0Babatunde S. Adekunle1Ademisola M. Oluwakemi2Economics Unit, Distance Learning Institute, University of Lagos, Lagos, NigeriaEconomics Unit, Distance Learning Institute, University of Lagos, Lagos, NigeriaEconomics Unit, Distance Learning Institute, University of Lagos, Lagos, NigeriaThe large-scale war between Russia and Ukraine has increased global oil prices, signaling a new era of macroeconomic shock management for both developed and developing countries. Consequently, this study investigates the passthrough effect of oil prices on domestic inflation in selected African countries in a single estimation framework using the global vector autoregressive (GVAR) estimation technique. To achieve the objective of this study, country-specific data were gathered from twenty-one African countries and four foreign countries selected based on trade relations. The results from our estimation demonstrate that the domestic general price level in African countries responds to global oil price shocks. Also, like any other part of the world, a disparity-like response is observable for African countries. This is tightly connected to whether the country is a metal-resource-rich, non-rich resource, or oil-rich country. The study thus concludes that positive shocks in the global price of crude oil will worsen the delicate position of the domestic general price level in non-oil-producing African countries. Efforts to minimize the impact of international oil shocks in these countries should center around investment in renewable energy and stabilization of the economy’s supply side through proactive and effective macroeconomic management.https://hrcak.srce.hr/file/472280macroeconomicsGVARinflationAfrica |
| spellingShingle | Lukman O. Oyelami Babatunde S. Adekunle Ademisola M. Oluwakemi Investigating the Pass-Through Effect of Global Oil Price Shock on Domestic Inflation in Selected African Countries Croatian Economic Survey macroeconomics GVAR inflation Africa |
| title | Investigating the Pass-Through Effect of Global Oil Price Shock on Domestic Inflation in Selected African Countries |
| title_full | Investigating the Pass-Through Effect of Global Oil Price Shock on Domestic Inflation in Selected African Countries |
| title_fullStr | Investigating the Pass-Through Effect of Global Oil Price Shock on Domestic Inflation in Selected African Countries |
| title_full_unstemmed | Investigating the Pass-Through Effect of Global Oil Price Shock on Domestic Inflation in Selected African Countries |
| title_short | Investigating the Pass-Through Effect of Global Oil Price Shock on Domestic Inflation in Selected African Countries |
| title_sort | investigating the pass through effect of global oil price shock on domestic inflation in selected african countries |
| topic | macroeconomics GVAR inflation Africa |
| url | https://hrcak.srce.hr/file/472280 |
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