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Impact of oil price fluctuations on food prices: fresh insight from asymmetric ARDL approach of co-integration

Author

Listed:
  • Umair Kashif
  • Chen Hong
  • Snovia Naseem
  • Muhammad Waqar Akram
  • Muhammad Saeed Meo

Abstract

The current study analyses the asymmetric effects of oil prices on food prices in Pakistan from 1977 to 2017. ADF, PP, and KPSS root unit tests were used to substantiate data stationarity, while nonlinear autoregressive distributed lags (NARDL) were utilised for asymmetry testing. The NARDL results confirm co-integration and show a strong positive impression of oil price rise to food prices in the long-run. In the meantime, a decline in oil prices relationship with food prices is absent and inconsequential. Additionally, positive changes in oil prices have a considerable role in food prices only in the short-run. Due to the absence of the significant influence of oil prices reduction at food prices in the short-run and long-run, market strength could be essential for forming Pakistan's food value behaviour.

Suggested Citation

  • Umair Kashif & Chen Hong & Snovia Naseem & Muhammad Waqar Akram & Muhammad Saeed Meo, 2022. "Impact of oil price fluctuations on food prices: fresh insight from asymmetric ARDL approach of co-integration," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 44(2/3), pages 264-280.
    • Handle: RePEc:ids:ijgeni:v:44:y:2022:i:2/3:p:264-280
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