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The Effects of the Oil Price Shock on Inflation: The Case of Kazakhstan

Author

Listed:
  • Dinmukhamed Kelesbayev

    (Khoja Akhmet Yassawi International Kazakh-Turkish University, Turkestan, Kazakstan.)

  • Kundyz Myrzabekkyzy

    (Khoja Akhmet Yassawi International Kazakh-Turkish University, Turkestan, Kazakstan.)

  • Artur Bolganbayev

    (Khoja Akhmet Yassawi International Kazakh-Turkish University, Turkestan, Kazakstan)

  • Sabit Baimaganbetov

    (Khoja Akhmet Yassawi International Kazakh-Turkish University, Turkestan, Kazakstan)

Abstract

Increases in oil prices cause inflation. Interest rates are expected to decrease as a result of the expansionary monetary policies of the central banks in response to the indirect effect of increasing oil prices on inflation. Because an increase in oil price creates an additional foreign currency inflow to Kazakhstan, this leads to the appreciation of its national currency tenge. Therefore, this study uses monthly Brent Oil Price (OP), Consumer Price Index (CPI), and Real Effective Exchange Rate (REER) values for the period 2015:M1 2021:M11 to investigate the effect of oil price on inflation and real exchange rate in Kazakhstan. Analysis are performed using the Structural Vector Autoregression (SVAR) model. The results showed that while the Real Effective Exchange Rate mostly affects the Oil Price, the Consumer Price Index variable affects the Real Effective Exchange Rate.

Suggested Citation

  • Dinmukhamed Kelesbayev & Kundyz Myrzabekkyzy & Artur Bolganbayev & Sabit Baimaganbetov, 2022. "The Effects of the Oil Price Shock on Inflation: The Case of Kazakhstan," International Journal of Energy Economics and Policy, Econjournals, vol. 12(3), pages 477-481, May.
    • Handle: RePEc:eco:journ2:2022-03-52
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    References listed on IDEAS

    as
    1. Sabit Baimaganbetov & Dinmukhamed Kelesbayev & Gulzhan Baibosynova & Rima Yermankulova & Botagoz Dandayeva, 2021. "The Impact of Oil Prices on the Food Inflation in Kazakhstan," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 73-79.
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    5. Dinmukhamed Kelesbayev & Kundyz Myrzabekkyzy & Artur Bolganbayev & Sabit Baimaganbetov, 2022. "The Impact of Oil Prices on the Stock Market and Real Exchange Rate: The Case of Kazakhstan," International Journal of Energy Economics and Policy, Econjournals, vol. 12(1), pages 163-168.
    6. Tiwari, Aviral Kumar & Cunado, Juncal & Hatemi-J, Abdulnasser & Gupta, Rangan, 2019. "Oil price-inflation pass-through in the United States over 1871 to 2018: A wavelet coherency analysis," Structural Change and Economic Dynamics, Elsevier, vol. 50(C), pages 51-55.
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    8. Artur Bolganbayev & Kundyz Myrzabekkyzy & Sabit Baimaganbetov & Dinmukhamed Kelesbayev, 2021. "The Effect of Oil Prices on the Economic Growth of Oil Exporting Countries Bordering the Caspian Sea: Panel Data Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 11(6), pages 432-437.
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    10. Kashif Zaheer Malik & Haram Ajmal & Muhammad Umer Zahid, 2017. "Oil Price Shock and its Impact on the Macroeconomic Variables of Pakistan: A Structural Vector Autoregressive Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 7(5), pages 83-92.
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    Cited by:

    1. Meiramkul Saiymova & Marija Troyanskaya & Kulyash Shalgimbayeva & Zhanat Babazhanova & Roza Jumabekova, 2023. "The Vector Auto Regression Analysis of the Link between Renewable Energy Consumption and Economic Development for Turkey and Kazakhstan," International Journal of Energy Economics and Policy, Econjournals, vol. 13(2), pages 309-315, March.
    2. Zhazira Taibek & Indira Kozhamkulova & Almas Kuralbayev & Bagdat K. Spanova & Kundyz Myrzabekkyzy, 2023. "Analysis of the Effect of Oil and Energy Production on Health and Education Expenditures in Kazakhstan with Autoregressive Distributed Lag Method," International Journal of Energy Economics and Policy, Econjournals, vol. 13(2), pages 215-221, March.
    3. Bibigul Izatullayeva & Gulzhanat Tayauova & Gulnara Sadykova & Madina Toktibayeva & Altynbek Kenzhaliyev, 2023. "A Comparison of the Returns of Oil and Energy Companies Quoted in Kase and the Returns of the Kase Index, Exchange Rate, and Selected International Energy Indices," International Journal of Energy Economics and Policy, Econjournals, vol. 13(1), pages 395-402, January.

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    More about this item

    Keywords

    Oil price; Structural Vector Autoregression; Inflation; Real Effective Exchange Rate; Kazakhstan;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • P44 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - National Income, Product, and Expenditure; Money; Inflation
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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