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Exploring the impact of oil revenues on OPEC members' macroeconomy
Author(s) -
Almulali Usama,
Sab Che Normee Binti Che
Publication year - 2013
Publication title -
opec energy review
Language(s) - English
Resource type - Journals
eISSN - 1753-0237
pISSN - 1753-0229
DOI - 10.1111/opec.12014
Subject(s) - economics , revenue , exchange rate , monetary economics , effective exchange rate , consumption (sociology) , gross domestic product , balance of trade , investment (military) , crude oil , short run , government revenue , current account , oil price , international economics , macroeconomics , finance , social science , sociology , petroleum engineering , engineering , politics , law , political science
This study investigated the impact of oil revenues on the macroeconomy in the O rganization of P etroleum E xporting C ountries ( OPEC ). The panel model was used taking the period 2000–2011 when oil prices increased to high levels causing an increase in the oil revenues of the investigated countries. The results showed that oil exports revenues have a long‐run and a short‐run positive relationship with the gross domestic product, domestic investment, government consumption expenditure and the consumer price index. However, the results also showed that oil exports revenues have a long‐run and a short‐run negative relationship with the real exchange rate, gross domestic savings and the current account balance. Therefore, it was recommended that these countries should reduce their level of domestic consumption and increase their domestic savings. It was also recommended that these countries should reduce their real exchange rate appreciation and use more flexible exchange rate regimes.