Open AccessDo Crude Oil Price Changes Affect Economic Welfare? Empirical Evidence from Ghana
Author(s) -
Kofi Kamasa
Publication year - 2020
Publication title -
ghana mining journal
Language(s) - English
Resource type - Journals
eISSN - 2616-1478
pISSN - 0855-210X
DOI - 10.4314/gm.v20i1.6
Subject(s) - economics , distributed lag , welfare , openness to experience , short run , crude oil , investment (military) , lag , cointegration , econometrics , monetary economics , macroeconomics , psychology , social psychology , computer network , politics , political science , petroleum engineering , law , market economy , computer science , engineering
This paper sought to explore the impact of crude oil price changes on economic welfare in Ghana. The paper employed the Autoregressive distributed lag (ARDL) estimation technique on an annual time series data spanning 1983 – 2017. The findings revealed that crude oil price changes have a negative and significant impact on economic welfare in the short and long run, albeit marginal. In terms of covariates, the findings revealed that trade openness and gross fixed capital formation have positive and significant impact whilst interest rate have negative impact on economic welfare in both the short and long run. Foreign direct investment had a positive effect, albeit insignificant. The paper recommends among others, the hedging of prices with respect to imported crude oil so as to manage the risks associated with crude oil price changes on economic welfare.
Keywords: Economic Welfare; Crude Oil Prices Changes; Autoregressive Distributed Lag; Ghana