HOW ARE FUEL PRICES LINKED TO FIJI’S MACROECONOMY?

Joel Abraham () and Prof. Paresh K. Narayan ()
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Joel Abraham: Fijian Competition and Consumer Commission
Prof. Paresh K. Narayan: Monash University - Australia

Bulletin of Monetary Economics and Banking, 2023, vol. 26, issue 3, 437-444

Abstract: Understanding how well the fuel market (or its prices) are linked to a country’s macroeconomy has both fiscal and monetary policy coordination implications. This note attempts to provide an understanding of how shocks from the fuel market impact the macroeconomy and vice versa. Our results are novel: we show that Fiji’s macroeconomy only absorbs a maximum of 31% of shocks from the system, implying that most movements in the macroeconomy are due to fundamentals and not the fuel market. The key policy message is that pricing behavior and any price controls associated with the fuel market will not have negative macroeconomic connotations.

Keywords: Fuel prices; Macroeconomy; Fiscal-monetary policy coordination (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:26:y:2023:i:3b:p:437-444

DOI: 10.59091/2460-9196.2106

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