Is the relationship between oil-gas prices index and economic growth in Turkey permanent?

Mustafa Kırca, Şerif Canbay () and Kerem Pirali

Resources Policy, 2020, vol. 69, issue C

Abstract: Oil and gas are the most important inputs that countries use in their production process. For this reason, changes in oil-gas prices affect economic growth, which is the most important macroeconomic performance indicator. This study aims to investigate whether the relations between the oil-gas prices index and economic growth are permanent in Turkey, covering the period 1998Q1-2019Q4. For this purpose, the relationships between variables are first examined by Granger and Toda-Yamamoto causality tests with structural breaks. Then, we analyze whether the relationships between them are permanent using frequency domain causality tests based on these two tests. There is insignificant causality relationship between the variables according to Granger and the Frequency Domain Causality Test results based on this test. However, according to the results of the Toda-Yamamoto causality test with a structural break, there is a causality relationship from oil-gas prices to economic growth. According to the results of the Frequency Domain Causality Test based on this test, the permanent effect of oil-gas prices on economic growth is approximately five years.

Keywords: Economic growth; Oil-gas prices; Structural breaks; Frequency domain causality test; Turkey (search for similar items in EconPapers)
JEL-codes: C22 O47 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:69:y:2020:i:c:s0301420720308709

DOI: 10.1016/j.resourpol.2020.101838

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