HOW DO OIL PRICE CHANGES AFFECT THE CURRENT ACCOUNT BALANCE? EVIDENCE FROM CO-INTEGRATION AND CAUSALITY TESTS

• Authors: Turan Taren , Karakas Mesut , Ozer Huseyin Alperen
• Languages of publication: EN

Abstracts

EN

This paper examines the relationship between the global oil prices and current account balances in Czech Republic, Hungary, and Poland by using ARDL and causality analysis. Our estimates indicate that there is a co-integrating relationship among the global oil price, current account balance, GDP growth rate, and real exchange rate in the sample countries. We find that a change in oil price has a significant effect on the current account balance in Poland and Czech Republic. Additionally, our results suggest that a change in the growth rate exerts a significant effect on the current account in these two countries. Moreover, there is a causal relationship running from the oil prices to current account balances in all sample countries in the short run. Furthermore, it seems that the growth rates Granger cause the current account in Czech Republic and Hungary in the short run. Finally, we also detect a long run and strong causality between variables in some cases.

Keywords

EN

CURRENT ACCOUNT; OIL PRICES; ARDL; CZECH REPUBLIC; POLAND; HUNGARY

• Publisher: Institute of Slovak and World Economics and Institute for Forecasting, Slovak Academy of Sciences
• Journal: Ekonomický časopis (Journal of Economics)
• Year: 2020
• Volume: 68
• Issue: 1
• Pages: 55 – 68

Contributors

author

Turan Taren

• Gebze Technical University, Department of Economics, 41400 Kocaeli, Turkey

author

Karakas Mesut

author

Ozer Huseyin Alperen