The Impact of International Oil Prices on Industrial Production: The Case of Thailand
AbstractThis paper analyzes the impact of international oil prices on Thailand’s industrial production using Johansen cointegration test. The results show that U.S. dollar real exchange rate does not affect the economy’s industrial production index, while oil prices, and real money supply significantly impose a positive impact on the index. The positive relationship between industrial production index and oil prices indicates that the manufacturing sector can adjust itself to higher costs of production in the long run. In the short run, industrial production are affected by real money supply, real exchange rate and international oil prices. However, any deviation from a stationary long-run equilibrium in the short run will be corrected in a short period of time.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 47035.
Date of creation: Dec 2006
Date of revision:
Publication status: Published in NIDA Economic Review 2.1(2006): pp. 35-42
Industrial production ; oil prices; VAR; Cointegration;
Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
- E0 - Macroeconomics and Monetary Economics - - General
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