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The impact of oil prices on income and energy

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  • Young Glasure
  • Aie-Rie Lee

Abstract

The major determinant of real income growth in Korea is real oil prices, followed by money supply, exchange rates, energy consumption, and government spending. Over the longer horizon, the effects of exchange rates, oil prices, government spending, and money supply become more pronounced. For energy consumption, the most important factor is oil prices, followed by exchange rates, government spending, money supply, and income. For the association between energy consumption and real income, energy consumption influences real income growth only through energy consumption, while real income affects energy consumption only through the error correction term. The findings of the study thus suggest that the level of economic activity and energy consumption mutually influence each other. Copyright International Atlantic Economic Society 2002

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  • Young Glasure & Aie-Rie Lee, 2002. "The impact of oil prices on income and energy," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 8(2), pages 148-154, May.
    • Handle: RePEc:kap:iaecre:v:8:y:2002:i:2:p:148-154:10.1007/bf02295345
    DOI: 10.1007/BF02295345
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    References listed on IDEAS

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    Cited by:

    1. Odhiambo, Nicholas M. & Nyasha, Shiella, 2018. "Oil prices and economic growth in Kenya: A trivariate simulation," Working Papers 24411, University of South Africa, Department of Economics.
    2. Nasir, Muhammad Ali & Al-Emadi, Ahmed Abdulsalam & Shahbaz, Muhammad & Hammoudeh, Shawkat, 2019. "Importance of oil shocks and the GCC macroeconomy: A structural VAR analysis," Resources Policy, Elsevier, vol. 61(C), pages 166-179.
    3. Sahbi FARHANI, 2012. "Impact of Oil Price Increases on U.S. Economic Growth:Causality Analysis and Study of the Weakening Effects in Relationship," International Journal of Energy Economics and Policy, Econjournals, vol. 2(3), pages 108-122.
    4. Prasad, Arti & Narayan, Paresh Kumar & Narayan, Jashwini, 2007. "Exploring the oil price and real GDP nexus for a small island economy, the Fiji Islands," Energy Policy, Elsevier, vol. 35(12), pages 6506-6513, December.
    5. Kebede, Ellene & Kagochi, John & Jolly, Curtis M., 2010. "Energy consumption and economic development in Sub-Sahara Africa," Energy Economics, Elsevier, vol. 32(3), pages 532-537, May.
    6. Jayaraman, T.K. & Choong, Chee-Keong, 2009. "Growth and oil price: A study of causal relationships in small Pacific Island countries," Energy Policy, Elsevier, vol. 37(6), pages 2182-2189, June.

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