NSU Research Contributions
Title : THE CAUSAL RELATIONSHIP BETWEEN OIL PRICE AND INFLATION IN BANGLADESH: AN EMPIRICAL ANALYSIS
Authors : Sakib Bin Amin, Mahnaz Atique, Farheen Rishta Binte Benazir
Abstract : Bangladesh is one of the fastest growing developing economies in the South Asian region with very little fossil fuel endowment. As a result, the country typically relies on imported energy sources. Existing media reports point out an increase in global energy prices in recent years. An increase in global oil price simultaneously increases the rate of inflation in the oil importing countries as well. Hence, the aim of this paper is to empirically analyze the short run and long run causal relationship between oil price in the international market and domestic inflation in Bangladesh. Using annual data ranging from 1980 to 2021,the paper conducts a Johansen’s cointegration test to identify the variables’ cointegrating relationship. Moreover, Granger Causality and VECM causality test confirms a unidirectional causality runs from oil price in the international market to domestic inflation in Bangladesh, both in the short run and in the long run.
| Journal : North South Business Review, | Volume : 13 | Year : 2022 | Issue : 1 |
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