THE IMPACT OF INTERNATIONAL OIL PRICE INCREASE ON THE ECONOMY OF FREE STATE PROVINCE OF SOUTH AFRICA

Yonas Bahta

International Journal of Food and Agricultural Economics (IJFAEC), 2014, vol. 02, issue 01, 10

Abstract: This article researches quantitatively the impact of an increase in the international oil price on economy of the Free State provincial economy using a Computable General Equilibrium model. The result of an increase international oil price shows that, the percentage in labour demand of transport, other services, agriculture, and manufacturing sector decrease. The GDP of the overall economy decrease by 0.01%, the highest decrease observed in transport sector followed by other services, agriculture and manufacturing sector. It also reflects that from the household income analysis the lower income households are more affected compared to the rest of household categories.Considering poverty (measured in terms of Equivalent Variation) the results also suggest that the lowest welfare gain observed in poor households. The results suggest that it is inevitable that there will always be some external shocks outside the control of economic policies. Hence it is necessary to strengthen the effectiveness of economic growth by incorporating target available resources and ensuring coherence in policy design.

Keywords: Agricultural and Food Policy; International Relations/Trade (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/163708/files/vol2.no1.pp41.pdf (application/pdf)

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:ags:ijfaec:163708

DOI: 10.22004/ag.econ.163708

Access Statistics for this article

More articles in International Journal of Food and Agricultural Economics (IJFAEC) from Alanya Alaaddin Keykubat University, Department of Economics and Finance Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().