Asymmetric and Dynamic Effects of Oil Price Shocks and Exchange Rate Fluctuations: Evidence from a Panel of Economic Community of West African States (ECOWAS)

Authors

  • Abimelech Paye Gbatu ACADEMY OF CHINESE ENERGY STRATEGY, CHINA UNIVERSITY OF PETROLEUM - BEIJING
  • Zhen Wang ACADEMY OF CHINESE ENERGY STRATEGY, CHINA UNIVERSITY OF PETROLEUM - BEIJING
  • Presley K Wesseh, Jr China Center for Energy Economics Research College of Economics, Xiamen University, Xiamen 361005, China
  • Isaac Yak Repha Tutdel Academy of Chinese Energy Strategy China University of Petroleum – Beijing 18 Fuxue Road, Changping, Beijing 102249, China

Abstract

Researches intended to influence key decisions on energy policy are paramount for ECOWAS's development agenda. Therefore, we employ fixed effect model to examine the impacts of oil price shocks and exchange rate volatility on real GDP in the ECOWAS countries. For each oil price shock, three equations are estimated: the sample of all ECOWAS countries and the samples with net-oil exporters and net-oil importers. The empirical results provide evidences of both linear and asymmetric effects of oil price shocks on real GDP for the full ECOWAS sample and for the net-oil importers. Additionally, there are evidences that exchange rate volatility negatively and significantly influence real GDP of the full ECOWAS sample and the net-oil importers. Therefore, we recommend the implementation of economic diversification policy away from oil reliance toward dependence on other energy types, and implementation of monetary policies to stabilize volatile exchange rate regime in oil-importing ECOWAS countries.

Keywords: Asymmetry; ECOWAS countries; exchange rate volatility and oil price shocks

JEL Classifications: C33, F31, C5, E6

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Author Biographies

Abimelech Paye Gbatu, ACADEMY OF CHINESE ENERGY STRATEGY, CHINA UNIVERSITY OF PETROLEUM - BEIJING

Academy of Energy Strategy,College of Business Administration,Department of Management Science and Engineering,PhD CANDIDATE

Zhen Wang, ACADEMY OF CHINESE ENERGY STRATEGY, CHINA UNIVERSITY OF PETROLEUM - BEIJING

Professor of Finance

Presley K Wesseh, Jr, China Center for Energy Economics Research College of Economics, Xiamen University, Xiamen 361005, China

Associate Professor

Isaac Yak Repha Tutdel, Academy of Chinese Energy Strategy China University of Petroleum – Beijing 18 Fuxue Road, Changping, Beijing 102249, China

PhD Candidate

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Published

2017-07-18

How to Cite

Gbatu, A. P., Wang, Z., Wesseh, Jr, P. K., & Tutdel, I. Y. R. (2017). Asymmetric and Dynamic Effects of Oil Price Shocks and Exchange Rate Fluctuations: Evidence from a Panel of Economic Community of West African States (ECOWAS). International Journal of Energy Economics and Policy, 7(3), 1–13. Retrieved from https://econjournals.com/index.php/ijeep/article/view/4447

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