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Impact of Oil Price Shocks on Sudan’s Government Budget

Author

Listed:
  • Elsiddig Rahma

    (Faculty of Engineering and Environment, Northumbria University, NE1 8NT, Newcastle Upon Tyne, Tyne and Wear, England)

  • Noel Perera

    (Faculty of Engineering and Environment, Northumbria University, NE1 8NT, Newcastle Upon Tyne, Tyne and Wear, England)

  • Kian Tan

    (Faculty of Engineering and Environment, Northumbria University, NE1 8NT, Newcastle Upon Tyne, Tyne and Wear, England)

Abstract

There is well established literature on the negative relationship between oil price shocks and aggregate macroeconomic activities for developed economies. However, there is a paucity of similar empirical studies in developing countries. In this respect, Sudan is a prominent example. This paper attempts to address this gap by employing the vector auto-regression model to explore the impact of oil price shocks on the main variables of the Sudan’s government budget using quarterly data for the period 2000:q1-2011:q2. The empirical results suggest that oil price decreases significantly influences oil revenues, current expenditure and budget deficit. However, oil price increases do not Granger cause budget variables. Results from the impulse response functions and forecast error variance decomposition analysis suggest that oil price shocks have asymmetric effect on government budget

Suggested Citation

  • Elsiddig Rahma & Noel Perera & Kian Tan, 2016. "Impact of Oil Price Shocks on Sudan’s Government Budget," International Journal of Energy Economics and Policy, Econjournals, vol. 6(2), pages 243-248.
  • Handle: RePEc:eco:journ2:2016-02-12
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    References listed on IDEAS

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    1. repec:eco:journ2:2018-06-22 is not listed on IDEAS

    More about this item

    Keywords

    Vector Auto-regression Model; Oil Price Shocks; Sudan;

    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
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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