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Title: The Impact of Oil Prices on Inflation: The Case of Azerbaijan
Authors: Mukhtarov, Shahriyar
Mammadov, Jeyhun
Ahmadov, Fariz
Keywords: Oil Price
Exchange Rate
Vector Error Correction Model
Issue Date: Jul-2019
Publisher: International Journal of Energy Economics and Policy
Series/Report no.: Vol 9;Issue 4
Abstract: This paper investigates the relationship between ination, oil prices and exchange rate in Azerbaijan using the vector error correction model (VECM) to the data ranging from 1995 to 2017. The results from cointegration method conrm the existence of a long-run relationship among the variables. Moreover, estimation results of VECM show that the oil prices and exchange rate have positive and statistically signicant impact on ination in the long-run. This implies that 1% increase in oil prices and exchange rate increases ination by 0.58% and 1.81%, respectively. The results of the study also reveal that ination is observed during the periods of both high and low oil prices, and the exchange rate acts as the transmission channel from oil prices to ination.
ISSN: 2146-4553
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