Modelling the Impact of World Oil Prices and the Mining and Quarrying Sector on the United Arab Emirates’ GDP

Ahmad Al Humssi (), Maria Petrovskaya and Milana Abueva
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Ahmad Al Humssi: Department of Accounting, Audit and Statistics, Economic Faculty, Peoples’ Friendship University of Russia (RUDN University), 6 Miklukho-Maklaya Street, 117198 Moscow, Russia
Maria Petrovskaya: Department of Accounting, Audit and Statistics, Economic Faculty, Peoples’ Friendship University of Russia (RUDN University), 6 Miklukho-Maklaya Street, 117198 Moscow, Russia
Milana Abueva: Department of Accounting, Audit and Statistics, Economic Faculty, Peoples’ Friendship University of Russia (RUDN University), 6 Miklukho-Maklaya Street, 117198 Moscow, Russia

Mathematics, 2022, vol. 11, issue 1, 1-22

Abstract: In this research, we aimed to model the impact of world oil prices on the gross domestic product of the United Arab Emirates (UAE). The objective of the study was to determine the transmission mechanism of the influence of the changing oil price within the macroeconomic indicators of the UAE. In this study, we analysed the impact of world oil prices and the crude oil sector on economic growth in the UAE for the period of 2001–2020 by applying ADF, OLS, ARDL, and Granger causality techniques. The results also showed the direct impact of the changes in oil prices on the GDP of the UAE in the short and long terms; in other words, a decline in oil prices could pose a threat to the economic security of the UAE in the long term if appropriate corrective measures are not taken. In order to avoid these negative consequences of the oil price crisis, in this study, we emphasize that the only alternative to exporting oil is to diversify economic sources for long-term development and increase the efficiency of non-oil sectors.

Keywords: macroeconomic modelling; United Arab Emirates; crude oil prices; world energy markets; economic development; emerging markets; non-oil revenue; economic diversification (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2022
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