THE IMPACT OF OIL PRICE SHOCKS ON THE ECONOMIC GROWTH OF LIBYA: AN ARDL-BOUND TESTING APPROACH

Authors : Nagmi AİMER

Pages : 59-81

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Publication Date : 2020-03-30

Article Type : Other Papers

Abstract :This paper examines how oil price shocks affect the Libyan economic growth over the period from 1990 to 2016. Using the autoregressive distributed lag insert ignore into journalissuearticles values(ARDL); bounds test, the study finds that oil price changes affect the Libyan economic growth. Oil prices are important in explaining GDP movements. Moreover, this test suggests that oil price has a long-term positive impact on economic growth. Our empirical results indicate a two-way causal relationship between oil prices and GDP, while a one-way causal relationship arises from imports and trade openness to oil prices. However, oil price shocks do not appear to have a statistically significant effect on the trade balance. The result shows that the country should formulate appropriate energy conservation policies taking into cognizance of her peculiar condition.
Keywords : Oil prices shocks, Economic growth, Libyan economy