THE REAL INFLUENCES OF OIL PRICE CHANGES ON THE GROWTH OF REAL GDP: THE CASE OF SOUTH AFRICA

Hlompo Maruping () and Itumeleng Mongale ()
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Hlompo Maruping: NORTH WEST UNIVERSITY (MAFIKENG CAMPUS)
Itumeleng Mongale: UNIVERSITY OF LIMPOPO

No 3305561, Proceedings of International Academic Conferences from International Institute of Social and Economic Sciences

Abstract: Oil price fluctuation is a cause of concern for most of the economies of the world including South Africa. The premise is that since oil consumption is regarded as one of the major determinants of the economic activities in any country, therefore the price fluctuations have a potential of slowing down the economic growth. The purpose of this study is to analyse the influences of oil price changes on economic growth in South Africa. Determining such a relationship will not only be helpful to the academic community, but also to the policy makers and the international community. The study utilises secondary data to examine quarterly time series data from the year 1990Q1-2014Q1. Several sources of data (websites) like SARB, Quantec, and International Monetary Funds, among others, were considered to find the most relevant data. The model was estimated by using a cointegrating vector autoregressive frame work and it was passed through a battery of diagnostic and stability test. The Generalised Impulse Response Function was employed to examine the dynamic relations among the variables under study. The results show that there is a positive relationship between economic growth and oil prices fluctuations.

Keywords: Oil prices; Economic Growth; cointegrating vector autoregressive; Generalised Impulse Response Function; South Africa. (search for similar items in EconPapers)
JEL-codes: B41 C50 C54 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2016-03
New Economics Papers: this item is included in nep-ene
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Published in Proceedings of the Proceedings of the 21st International Academic Conference, Miami, Mar 2016, pages 122-137

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