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Impacts of oil price, exchange rate and inflation on the economic activity of Malaysia

Mantai, Mohammed Mahmoud and Alom, Fardous (2016) Impacts of oil price, exchange rate and inflation on the economic activity of Malaysia. OPEC Energy Review, 40 (2). pp. 180-191. ISSN 1753-0229

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Abstract

The purpose of this study is to examine the short and long-run impacts of crude oil price (CP), exchange rate (EXR) and inflation (CPI) on the economic activity (GDP) of Malaysia within the framework of the vector error correction model (VECM). The results suggest that CP positively affects GDP in the short-run and the tests do not identify any significant impacts of EXR and CPI on the GDP. However, all these variables maintain a long-run relationship with GDP. The causality tests have shown unidirectional Granger causality that run from CP to GDP and not from EXR and CPI to GDP. The findings of this study are expected to provide insights for practitioners and policy makers to understand the impacts of the CP shocks and its spillovers in the economic activity of Malaysia.

Item Type: Article (Journal)
Additional Information: 7004/50995
Uncontrolled Keywords: oil price,exchange rate, inflation, economic activity, Malaysia
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HB Economic Theory > HB131 Methodology.Mathematical economics. Quantitative methods
Kulliyyahs/Centres/Divisions/Institutes: Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User: Dr Md Fardous Alom
Date Deposited: 28 Jun 2016 12:11
Last Modified: 22 Dec 2016 17:03
URI: http://irep.iium.edu.my/id/eprint/50995

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