Effects of world oil price movement on macroeconomic performance in Saudi Arabia

This study examines the impacts of oil price shocks on the macroeconomic performance of the Kingdom of Saudi Arabia. The method used in the analysis was autoregressive distributed lag (ARDL) model and fixed proportions theory of Leontief’s (1936) input-output analysis. Data were collected during a p...

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Main Author:	Youssouf, Mbodou Ali
Format:	Thesis
Language:	English
Published:	2019
Subjects:	Petroleum industry and trade - Saudi Arabia Fuel - Prices Equilibrium (Economics) - Econometric models
Online Access:	http://psasir.upm.edu.my/id/eprint/83078/1/FEP%202019%202%20ir.pdf
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id	my-upm-ir.83078
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spelling	my-upm-ir.830782022-01-11T01:41:43Z Effects of world oil price movement on macroeconomic performance in Saudi Arabia 2019-03 Youssouf, Mbodou Ali This study examines the impacts of oil price shocks on the macroeconomic performance of the Kingdom of Saudi Arabia. The method used in the analysis was autoregressive distributed lag (ARDL) model and fixed proportions theory of Leontief’s (1936) input-output analysis. Data were collected during a period from the year 1991 to the year 2016 from the World Bank. The ARDL approach assures the existence of a long-run relationship and the effect of world oil price movement on macroeconomic performance. The result revealed that interest rate and exchange rate have a significant negative effect on export analysis in the long run. The result further indicated that interest rate has a significant negative effect while gross domestic product has a significant positive effect on government revenue. Finally, the result showed that interest rate has a significant positive effect on employment. The second objective of this study is to investigate the use of the input-output models to assess the effect of oil price movement on export, government revenue, and employment. The result revealed that the world oil price movement has a significant effect on all sectors. The world oil price has reduced revenues, lowered export revenue, and decreased employment. The most affected sectors due to world oil movement are mining and quarrying, wholesale and retail trade, repairs, renting of machinery, and equipment. The least affected sectors are education, electricity, gas and water supply, post and telecommunications. The value added to these sectors is mainly through forward linkages, implying that the output of these sectors demands high oil price to contribute to economic growth. The implication of this research is the multiplier impact of negative oil shocks arising from depending on crude oil can be large. Thus, we recommend that policymakers implement policies that will diversify the economy and encourage the production of goods and services from other sectors. Petroleum industry and trade - Saudi Arabia Fuel - Prices Equilibrium (Economics) - Econometric models 2019-03 Thesis http://psasir.upm.edu.my/id/eprint/83078/ http://psasir.upm.edu.my/id/eprint/83078/1/FEP%202019%202%20ir.pdf text en public masters Universiti Putra Malaysia Petroleum industry and trade - Saudi Arabia Fuel - Prices Equilibrium (Economics) - Econometric models Hassan, Azman
institution	Universiti Putra Malaysia
collection	PSAS Institutional Repository
language	English
advisor	Hassan, Azman
topic	Petroleum industry and trade - Saudi Arabia Fuel - Prices Equilibrium (Economics) - Econometric models
spellingShingle	Petroleum industry and trade - Saudi Arabia Fuel - Prices Equilibrium (Economics) - Econometric models Youssouf, Mbodou Ali Effects of world oil price movement on macroeconomic performance in Saudi Arabia
description	This study examines the impacts of oil price shocks on the macroeconomic performance of the Kingdom of Saudi Arabia. The method used in the analysis was autoregressive distributed lag (ARDL) model and fixed proportions theory of Leontief’s (1936) input-output analysis. Data were collected during a period from the year 1991 to the year 2016 from the World Bank. The ARDL approach assures the existence of a long-run relationship and the effect of world oil price movement on macroeconomic performance. The result revealed that interest rate and exchange rate have a significant negative effect on export analysis in the long run. The result further indicated that interest rate has a significant negative effect while gross domestic product has a significant positive effect on government revenue. Finally, the result showed that interest rate has a significant positive effect on employment. The second objective of this study is to investigate the use of the input-output models to assess the effect of oil price movement on export, government revenue, and employment. The result revealed that the world oil price movement has a significant effect on all sectors. The world oil price has reduced revenues, lowered export revenue, and decreased employment. The most affected sectors due to world oil movement are mining and quarrying, wholesale and retail trade, repairs, renting of machinery, and equipment. The least affected sectors are education, electricity, gas and water supply, post and telecommunications. The value added to these sectors is mainly through forward linkages, implying that the output of these sectors demands high oil price to contribute to economic growth. The implication of this research is the multiplier impact of negative oil shocks arising from depending on crude oil can be large. Thus, we recommend that policymakers implement policies that will diversify the economy and encourage the production of goods and services from other sectors.
format	Thesis
qualification_level	Master's degree
author	Youssouf, Mbodou Ali
author_facet	Youssouf, Mbodou Ali
author_sort	Youssouf, Mbodou Ali
title	Effects of world oil price movement on macroeconomic performance in Saudi Arabia
title_short	Effects of world oil price movement on macroeconomic performance in Saudi Arabia
title_full	Effects of world oil price movement on macroeconomic performance in Saudi Arabia
title_fullStr	Effects of world oil price movement on macroeconomic performance in Saudi Arabia
title_full_unstemmed	Effects of world oil price movement on macroeconomic performance in Saudi Arabia
title_sort	effects of world oil price movement on macroeconomic performance in saudi arabia
granting_institution	Universiti Putra Malaysia
publishDate	2019
url	http://psasir.upm.edu.my/id/eprint/83078/1/FEP%202019%202%20ir.pdf
_version_	1747813344337723392

Effects of world oil price movement on macroeconomic performance in Saudi Arabia

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