Oil price and economic performance: Additional evidence from advanced economies

Opeoluwa Adeniyi Adeosun, Mosab I. Tabash and Suhaib Anagreh

Resources Policy, 2022, vol. 77, issue C

Abstract: This study reexamines the causal relationship between oil price and economic performance (proxy by GDP returns) in seven selected advanced economies: Australia, Canada, China, the US, the UK, Japan, and Germany. We employ the homoscedastic and heteroscedastic-consistent versions of the Shi et al. (2020) bootstrap time-varying Granger causality to detect and date stamp causal changes in the relationship between oil price and GDP returns of the sample countries. Findings indicate bidirectional causality between oil price and economic performance for at least one month across all sample countries within notable global events such as the global financial crisis and the COVID-19 pandemic. The study also detects and date stamps long periods of causality running from the economic performances of Canada, China, the US, Japan, and Germany to oil prices using GDP returns as a predictor. The results indicate the weight and significance of the predictive power of the GDP growth of these economies in shaping the cyclical fluctuation of oil prices extending through pre and post COVID-19 epidemic. The findings inform some policy implications.

Keywords: Oil price; Economic performance; COVID-19; Global crisis; Date-stamping; Time-varying causality (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:77:y:2022:i:c:s0301420722001143

DOI: 10.1016/j.resourpol.2022.102666

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