An ARDL Approach on Crude Oil Price and Macroeconomic Variables

Phoong Seuk Wai ()
Additional contact information
Phoong Seuk Wai: Faculty of Business and Accountancy, University of Malaya, Malaysia Author-2-Name: Seuk Yen, Phoong Author-2-Workplace-Name: Department of Mathematics, Faculty Science and Mathematics, Sultan Idris Education University, 35900 Tanjung Malim, Perak, Malaysia Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:

GATR Journals from Global Academy of Training and Research (GATR) Enterprise

Abstract: Objective � The removal of fuel subsidies by the Malaysian government in 2014 has been implement with the managed float system for fuel prices. Methodology/Technique � This study investigates the impact of the managed floating system of crude oil prices on the Malaysian economy using ARDL approach by looking at macroeconomic variables such as inflation, economic growth and unemployment rates. Findings � The results show that all of the variables have short lived relationship with oil prices whereby inflation and economic growth are positively related to oil prices. However, unemployment rate has a negative relationship with the changes of WTI crude oil prices. Novelty � The major input in the economy of Malaysia contributes to a positive relationship between inflation and oil prices, whilst the contribution of Malaysia being an oil-producing country results in the positive relationship of economic growth and oil price. Likewise, as oil prices are high, the increase in demand results in increase in job opportunities. Lastly, the correlation test shows that inflation and economic growth have a high positive correlation while unemployment rate has a low negative correlation with oil price. Type of Paper: Empirical.

Keywords: ARDL; Crude Oil Price; GDP; Inflation; Unemployment. (search for similar items in EconPapers)
JEL-codes: E10 E30 E39 (search for similar items in EconPapers)
Pages: 6
Date: 2019-03-15
New Economics Papers: this item is included in nep-ene, nep-mac and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Journal of Business and Economics Review, Volume 4, Issue 1

Downloads: (external link)
http://gatrenterprise.com/GATRJournals/pdf_files/JBER%20Vol%204(1)/8.Phoong.pdf (application/pdf)
http://gatrenterprise.com/GATRJournals/online_submission.html

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gtr:gatrjs:jber171

Access Statistics for this paper

More papers in GATR Journals from Global Academy of Training and Research (GATR) Enterprise
Bibliographic data for series maintained by Prof. Dr. Abd Rahim Mohamad ().