A long run cointegration analysis between oil prices and economic output in pakistan

Rabia Saghir; Uzma Batool*

Abstract:

This study discovers how oil prices affect the economic growth in Pakistan by applying long run co-integration technique. The economic output is found evidently more sensitive to oil prices. A negative relationship between oil prices and economic output has been established in the literature. This paper argues that higher oil prices transform income from oil importing countries to oil exporting countries. So increases in oil prices have a negative impact on the economy of oil importers. Moreover, it has significant impact on economic growth. The trade openness also has a positive and significant impact on economic output. Long run results indicate that the coefficient of government investment has a positive and significant impact on growth.

research from:

• Foundation University - Faculty of Management Sciences

Year:

2018

Type of Publication:

Article

Journal:

The Empirical Economics Letters

Volume:

17

Number:

11

Pages:

1306-1312

Month:

11