The impact of oil prices on economic activity in administrated price structure: the case of Tunisia

Necibi, Thameur (2013): The impact of oil prices on economic activity in administrated price structure: the case of Tunisia.

Abstract

This article has for a core objective the handling of the established relation between oil price variation and certain macroeconomic variables, in this particular case GDP, RMM, CPI, Ex-factory price. The study in Tunisia is based on quarterly and monthly data from the period going from 2000 to 2011 revealed three important facts. First, it showed at the level of the quarterly analysis that the Tunisian authority succeeded in limiting the effect of crude oil price shock, it was approved through an impulse analysis of the dynamic responses, a second important result was revealed at the level of the quarterly analysis and the established long-term relation which showed that the GDP or the industrial production positively and significantly depend on Brent oil price and on the inflation in a structure of administered price. Second at the level of the monthly analysis, the conducted study allowed us to identify the nature of inflation, which is said to the production cost through introducing a new variable which is ex-factory price. Third, the conducted study allowed us to study the asymmetric relation between Brent oil price and the monetary mechanism in an administered price regime.

• Item Type: MPRA Paper
• Language: English
• Keywords: Macroeconomics, oil prices, inflation, asymmetry
• Subjects: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure ; Size Distribution of Firms

References

1. Balke, Nathan S., Stephen P. A. Brown, and Mine Ycel (1999), “Oil Price Shocks and the U.S. Economy: Where Does the Asymmetry Originate?” Working Paper, Federal Reserve Bank of Dallas.

2. Douglas B. Reynolds and Marek Kolodziej. (2008), “Former Soviet Union oil production and GDP decline: Granger causality and the multi-cycle Hubbert curve”, Energy Economics, Volume 30, pages 271–289.

3. Federer, J. (1996) “Oil Price Volatility and Macroeconomy, Journal of Macroeconomics”,Vol. 18,pp.1-26

4. Hamilton, J.D., Herrara, A.M., (2000), “Oil shocks and aggregate macroeconomic behavior: the role of monetary policy”. Journal of Money, Credit, and Banking, forthcoming.

5. Huntington, H. (1998), “Crude oil prices and U.S. economic performance: Where does the asymmetry reside?” The Energy Journal 19.

6. Jaime Casassus, Diego Ceballos and Freddy Higuera., Correlation structure between inflation and oil futures returns: An equilibrium approach, Resources Policy, Volume 35, Issue 4, December 2010, Pages 301-310.

7. James D. Hamilton., (2003), “ What is an oil shock?”, Journal of Econometrics, Volume 113, pages 363 - 398.

8. Jean-Pierre Allegret, Ccile Couharde and Cyriac Guillaumin., “The impact of external shocks in East Asia: Lessons from a structural VAR model with block exogeneity”, International Economics, Volume 132, April 2012, Pages 35-89.

9. J. Cunado, F. Perez de Gracia., (2005), “Oil prices, economic activity and inflation:evidence for some Asian countries”. The Quarterly Review of Economics and Finance, Volume 45, pp. 65-83.

10. J. Cunado, F. Perez de Gracia., (2003). ”Do Oil Price Shocks Matter? Evidence For Some Europesan Countries,” Energy Economics 25. pp 137-154Juncal Cunado, Fernando Perez de Gracia

11. Kumarjit Mandal, Indranil Bhattacharyya and Binod B. Bhoi., (2012), “Is the oil price pass-through in India any different? ”, Journal of Policy Modeling Volume 34, Issue 6, November-December 2012, Pages 832-848.

12. Luis J. lvarez Samuel Hurtado, Isabel Snchez and Carlos Thomas, “The impact of oil price changes on Spanish and euro area consumer price inflation”, BANCODEESPANA, Documentos Ocasionales, N:0904.

13. Mork, K.A., (1989), “Oil and the macroeconomy when prices go up and down: an extension of Hamilton’s results”. Journal of Political Economy, volume 91, pp 740-744.

14. Mork, Knut Anton, Oystein Olsen and Hans Terje Mysen., (1994), “Macroeconomic Responses to Oil Price Increases and Decreases in Seven OECD Countries”, Energy Journal, volume 15, pp 19-35.

15. Sandrine Lardic, Valrie Mignon. (2006), “The impact of oil prices on GDP in European countries: An empirical investigation based on asymmetric cointegration”. Energy policy, pp 3910-3915.

16. Stephen P .A. Brown and Mine K.Ycel. (2000), “Gasoline and crude oil prices:Why the asymmetry?”. Economic and financial review & Federal reserve bank of Dallas, Third Quarter 2000.

17. Sylvain Leduc, Keith Sill., (2004), “A quantitative analysis of oil-price shocks, systematic monetary policy, and economic downturns”. Journal of Monetary Economics, Volume 51, pp781-808.

18. Troy Lorde, Mahalia Jackman and Chrystol Thomas., (2007), “The macroeconomic effects of oil price fluctuations on a small open oil-producing country: The case of Trinidad and Tobago”, Energy Policy, Volume 37, Issue 7, July 2009, Pages 2708-2716.