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Crude Oil Price and Inflation in Pakistan

Author

Listed:
  • Saba Saleem

    (M.Phil Scholar at Department of Commerce, University of Karachi)

  • Khalil Ahmad

    (Ph.D. Scholar at National College of Business Administration & Economics (NCBA&E), Lahore, Pakistan)

Abstract

Economy of Pakistan has witnessed several inflationary episodes and voluminous literature has been presented in this regard but no specific attention has been given to the impact of crude oil prices on inflation in Pakistan. This research is particularly aimed to determine the existence and intensity of relation between crude oil price and inflation in Pakistan. Moreover the study also investigates other determinants of inflation in Pakistan. Effects of crude oil price on GDP deflator have been analyzed using time series data from 1979 to 2012. For long run and short run results Johansen Co-integration techniques have been employed for estimation. The study concludes that Money Supply, Crude Oil Price, Exchange Rate, Interest rate and Indirect taxes have positive while real GDP has negative impact on inflation during the study period.

Suggested Citation

  • Saba Saleem & Khalil Ahmad, 2015. "Crude Oil Price and Inflation in Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 4(1), pages 10-18, March.
    • Handle: RePEc:rfh:bbejor:v:4:y:2015:i:1:p:10-18
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    File URL: https://bbejournal.com/index.php/BBE/article/view/222/175
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    References listed on IDEAS

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    1. LeBlanc, Michael & Chinn, Menzie David, 2004. "Do High Oil Prices Presage Inflation? The Evidence from G-5 Countries," Santa Cruz Department of Economics, Working Paper Series qt4wt4m7hg, Department of Economics, UC Santa Cruz.
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    Cited by:

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