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Oil Price Shocks And Industry Level Production Using Vector Autoregression: Empirical Evidence From Pakistan

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  • Farhan Ahmed
  • Muhammad Osama Daudpota
  • Muhammad Kashif

Abstract

Industrial production is one of the leading indicators of gross domestic product and economic growth of the country. These factors exhibit the holistic enactment of any economy. Alternatively, the fluctuations in the industrial production level lead to contraction or expansion within the economy. Therefore, changes in prices of oil are the crucial inputs to the overall industrial production. This study examines the effects of oil prices shocks on the industrial production in Pakistan during the period July 2000-June 2015 by using VAR model. This research has shown that oil price shocks had a negative impact on industrial production in Pakistan to some extent. It is recommended to forecast oil prices for future that can help take precautionary steps to be flexible enough to control the impact on an industrial production level

Suggested Citation

  • Farhan Ahmed & Muhammad Osama Daudpota & Muhammad Kashif, 2017. "Oil Price Shocks And Industry Level Production Using Vector Autoregression: Empirical Evidence From Pakistan," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 11(3), pages 13-25.
    • Handle: RePEc:ibf:gjbres:v:11:y:2017:i:3:p:13-25
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    References listed on IDEAS

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    Cited by:

    1. Farhan Ahmed & Muhammad Kashif & Mumtaz Ahmed, 2018. "Gas Prices and Industrial Production Level: Empirical Evidence from Pakistan," International Journal of Energy Economics and Policy, Econjournals, vol. 8(3), pages 22-32.

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    More about this item

    Keywords

    Prices; Industrial Level Production; Granger Causality; Variance Decomposition;
    All these keywords.

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)

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