The Impact of Oil Prices on the Food Inflation in Kazakhstan

Authors

  • Sabit Baimaganbetov
  • Dinmukhamed Kelesbayev Turkestan city, Akhmet Yassawi University
  • Gulzhan Baibosynova
  • Rima Yermankulova
  • Botagoz Dandayeva

Abstract

This paper assesses empirically the effects of real oil price shocks on the food inflation in Kazakhstan for the monthly period 2004-2019 by using a VAR model. Standard unit root tests do not yield reliable results in the presence of breaks. In this regard, Zivot-Andrews (1992) has been tested with the help of unit root test. Food prices have been proven to be I(1) according to the Zivot-Andrews (1992) test, while I(0) is according to the ADF test. In subsequent steps, the causality test of the variables was performed. According to the test, there is a double-chance causality between oil prices and food prices. The short-term effect of the variables is investigated with the help of the VAR model. As a result, crude oil prices have an indirect impact on food prices.

Keywords: Kazakhstan, Oil Prices, Food Prices, Inflation, VAR Model, Unit-Root Test

JEL Classications: E64, L66, P44, Q41

DOI: https://doi.org/10.32479/ijeep.10844

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Author Biography

Dinmukhamed Kelesbayev, Turkestan city, Akhmet Yassawi University

Assoc. Prof. Dr.

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Published

2021-04-10

How to Cite

Baimaganbetov, S., Kelesbayev, D., Baibosynova, G., Yermankulova, R., & Dandayeva, B. (2021). The Impact of Oil Prices on the Food Inflation in Kazakhstan. International Journal of Energy Economics and Policy, 11(3), 73–79. Retrieved from http://econjournals.com/index.php/ijeep/article/view/10844

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