Oil Price Volatility, Monetary Policy and Economic Growth in Some Selected Africa Countries

Abstract

This research work assessed the relationship among oil Price Volatility, Monetary Policy and Economic growth in oil exporting Africa Countries somewhere in the range of 1990 and 2018. Specifically, the investigation looked into the impacts of macroeconomic factors on economic growth and broke down the interrelationships among monetary approach transmission instruments, Oil value stuns and yield development of oil exporting Africa Countries. Information for the investigation was sourced from World Development Indicators distributed by the World Bank, IMF online Database and Central Banks of chosen nations. The investigation employed Westerlund Error Correction Based Panel Cointegration test and Structural Vector Autoregressive (SVAR) as estimation methods. The unit root test resultshowed that the factors of intrigue were coordinated of a similar request that is I(1). Results from SVAR Impulse Response Functions demonstrated that the reaction of yield development to stuns radiating from both financial approach factors and unrefined petroleum cost was sure and huge all through the examination time frame. The outcomes further indicated that expansionary money related strategy that animates a reduction in household loan fee was more viable in expanding the yield development than contractionary monetary formation that motivates an increment local financing cost. It was discovered from the investigation that oil price volatility increase was just prone to modestly affect economic growth while oil price reduction has a huge negative impact on economic growth. This shows that the fall in oil price volatility have deteriorating impact on conversion scale, while oil price increment was seen as unessential to swapping scale development in oil exporting Africa Countries. In light of these discoveries, the analysis in this manner infers that there is deviated relationship among oil price volatility, monetary policy and economic growth in oil exporting Africa Countries.

Keywords: Monetary policy, Oil price and Economic growth

DOI: 10.7176/JESD/12-12-09

Publication date:June 30^th 2021