EXPLORING THE INFLATIONARY EFFECT OF OIL PRICE VOLATILITY IN AFRICA’S OIL EXPORTING COUNTRIES

Sina Jimoh Ogede, Emmanuel Oladapo George, Ibrahim Ayoade Adekunle

DOI Number
https://doi.org/10.22190/FUEO191202009O
First page
113
Last page
125

Abstract


A range of explanations had been offered for the apparent change in oil price-inflation relationship outcomes ranging from the possible use of alternate energy sources, change in the structure of output regarding fewer oil intensive sectors and the role of fiscal and monetary in the affected oil-exporting countries. These changes had drawn the attention of stakeholders, government and the society at large to the anecdotal relationship among oil price volatility, inflation, and output in Africa oil-exporting countries. This study leans empirical credence to the impact of oil price volatility on inflation and economic performance in the Africa oil-exporting countries from 1995 through 2017. We employed the Pool Mean Group estimation procedure with the inference drawn at a 5% level of significance. We found that oil price volatility had a negative and significant effect on inflation in Africa oil-exporting countries. The study concluded that oil price volatility had a substantial impact on inflation in the Africa oil-exporting countries. The study, therefore, recommended that Africa oil-exporting countries should adopt precautionary measures to monitor inflation potentials due to different responses of inflation to positive and negative oil price shocks.


Keywords

Oil Price Volatility; Inflation; Growth Outcomes; Pool Mean Group; Africa

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References


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DOI: https://doi.org/10.22190/FUEO191202009O

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