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Crude Oil Prices, Household Spending and Economic Growth in the ASEAN-4 Region: An Analysis of Nonlinear Panel Autoregressive Distributed Lag

Author

Listed:
  • Wali Aya Rumbia

    (Department of Economics, Universitas Halu Oleo, Kendari 93232, Indonesia,)

  • Abd Azis Muthalib

    (Department of Economics, Universitas Halu Oleo, Kendari 93232, Indonesia,)

  • Bakhtiar Abbas

    (Study Program of Management, Sekolah Tinggi Ilmu Ekonomi Enam-Enam, Kendari 93121, Indonesia,)

  • Pasrun Adam

    (Department of Mathematics, Universitas Halu Oleo, Kendari 93232, Indonesia,)

  • Heppi Millia

    (Department of Economics, Universitas Halu Oleo, Kendari 93232, Indonesia,)

  • La Ode Saidi

    (Department of Mathematics, Universitas Halu Oleo, Kendari 93232, Indonesia,)

  • Muh. Irfandy Azis

    (Department of Accounting, Universitas Borneo Tarakan, Tarakan 77123, Indonesia.)

Abstract

This paper looks at the long run and short run asymmetric impact of crude oil prices on Indonesia's economic growth. It also assesses whether household spending affects the economic growth in the ASEAN-4 Region (Indonesia, Singapore, Thailand and the Philippines) in the long run and short run. We use, to this end, annual time series data of crude oil prices, household consumption expenditure, and GDP for the period 1967-2018. To analyze the data, we employ a nonlinear panel autoregressive distributed lag model. The test results provide evidence that in the long-run, crude oil prices have an asymmetric impact on economic growth. Every 1% increase in crude oil prices, economic growth rises by 0.42%. Meanwhile, household spending does not affect economic growth in the long-run. Furthermore, in the short run, the test results show the presence of an asymmetric impact of crude oil prices on economic growth. Similarly, in the short run, household spending affects economic growth.

Suggested Citation

  • Wali Aya Rumbia & Abd Azis Muthalib & Bakhtiar Abbas & Pasrun Adam & Heppi Millia & La Ode Saidi & Muh. Irfandy Azis, 2020. "Crude Oil Prices, Household Spending and Economic Growth in the ASEAN-4 Region: An Analysis of Nonlinear Panel Autoregressive Distributed Lag," International Journal of Energy Economics and Policy, Econjournals, vol. 10(4), pages 437-442.
    • Handle: RePEc:eco:journ2:2020-04-55
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    References listed on IDEAS

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    4. Cologni, Alessandro & Manera, Matteo, 2008. "Oil prices, inflation and interest rates in a structural cointegrated VAR model for the G-7 countries," Energy Economics, Elsevier, vol. 30(3), pages 856-888, May.
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    Cited by:

    1. Arvian Triantoro & Muhammad Zaheer Akhtar & Shiraz Khan & Khalid Zaman & Haroon ur Rashid Khan & Abdul Wahab Pathath & Muhamad Amar Mahmad & Kamil Sertoglu, 2023. "Riding the Waves of Fluctuating Oil Prices: Decoding the Impact on Economic Growth," International Journal of Energy Economics and Policy, Econjournals, vol. 13(2), pages 34-50, March.
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    More about this item

    Keywords

    Crude Oil Prices; Household Spending; Economic Growth; Nonlinear Panel Autoregressive Distributed Lag Model.;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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