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- Title
Oil price uncertainty and real output growth: new evidence from selected oil-importing countries in the Middle East.
- Authors
Maghyereh, Aktham I.; Awartani, Basil; Sweidan, Osama D.
- Abstract
This paper provides an empirical evidence on the influence of oil price uncertainty on the real economic activity in Jordan and Turkey during the period 1986:01–2014:12. To measure the effect of uncertainty, the paper combines a bivariate structural VAR with a GARCH-in-mean process that allows oil volatility to affect the growth of industrial production. Our results indicate that oil market uncertainty has a negative influence on the industrial output of Jordan and Turkey. For instance, the increase in one standard error of oil price uncertainty is found to be associated with a decline of 0.81 and 1.01% in the industrial production of Jordan and Turkey, respectively. Moreover, consistent with the recent empirical evidence, we find that output growth increases/decreases after a negative/positive oil price shock. These results imply that sound energy policies that mitigate the effect of oil market uncertainty may help in stabilizing output in both countries.
- Subjects
PETROLEUM sales &; prices; MARKET volatility; PETROLEUM production; PETROLEUM export &; import trade; ECONOMIC activity
- Publication
Empirical Economics, 2019, Vol 56, Issue 5, p1601
- ISSN
0377-7332
- Publication type
Article
- DOI
10.1007/s00181-017-1402-7