The Long-run and Short-run Effects of Crude Oil Price on Methanol Market in Iran
AbstractSubstituting crude oil exports with value-added petrochemical products is one of the main strategies for policy makers in oil-driven economies to isolating the real sectors of economy from oil price volatility. This policy inclination has led to a body of literature in energy economics in recent decades. As a case study, this paper investigates the short-run and long-run relationship between Iran’s oil price and methanol price which is one of the most important non-oil exports of the oil-exporting country. To do so, the weekly data from 18 Jan. 2009 to 18 Sep. 2011 in a VECM framework is applied. The results show that in the long-run, oil price hikes leads to proportional increase in methanol price while in the short-run, this impact is not significant.
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Bibliographic InfoArticle provided by Econjournals in its journal International Journal of Energy Economics and Policy.
Volume (Year): 3 (2013)
Issue (Month): 1 ()
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Crude Oil; Methanol; VECM Model;
Other versions of this item:
- Komijani, Akbar & Gandali Alikhani, Nadiya & Naderi, Esmaeil, 2012. "The Long-run and Short-run Effects of Crude Oil Price on Methanol Market in Iran," MPRA Paper 45975, University Library of Munich, Germany.
- Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
- C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
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