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Oil Price shocks and theirs consequences on Sudan?s GDP growth and unemployment rates

Author

Listed:
  • Elsiddig Rahma

    (Northumbria University at Newcastle upon Tyne)

  • Noel Perera

    (Northumbria University)

  • Kian Tan

    (Northumbria University)

Abstract

Since the advent of oil production and export in late 1999, Sudan economy became more reliant on oil exports proceeds. This situation has exposed the economy to the negative effect of oil price fluctuations. In general, oil exporting countries exhibit positive impact on their economy to oil price increase, while oil importing economies suffer. Unlike developing economies, there is paucity of research in developing countries with regards to the relationship between macro-economy and oil price shocks. In this regard, Sudan has been neglected from serious studies related to oil price shocks. This research attempts to contribute towards filling this gap. In doing so, Vector Auto-Regression model is employed to investigate the impact of oil price shocks on the real GDP growth and unemployment rates over the period 2000 - 2014. The Granger causality test suggests that unemployment has statistically and significantly influenced real GDP growth. Results from the Impulse Response Functions and Forecast Error Variance Decomposition analysis suggest that decrease in oil price has a greater influence on GDP growth. Interestingly, oil price decrease has a significant positive impact on unemployment rate.

Suggested Citation

  • Elsiddig Rahma & Noel Perera & Kian Tan, 2016. "Oil Price shocks and theirs consequences on Sudan?s GDP growth and unemployment rates," Proceedings of International Academic Conferences 3305556, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iacpro:3305556
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    File URL: https://iises.net/proceedings/21st-international-academic-conference-miami/table-of-content/detail?cid=33&iid=033&rid=5556
    File Function: First version, 2016
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    Cited by:

    1. Nagmi M. Moftah Aimer, 2016. "The Effects of Fluctuations of Oil Price on Economic Growth of Libya," Energy Economics Letters, Asian Economic and Social Society, vol. 3(2), pages 17-29, December.

    More about this item

    Keywords

    VAR model; GDP growth; Unemployment rate; Sudan.;
    All these keywords.

    JEL classification:

    • 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
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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