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Do oil prices predict economic growth? New global evidence

journal contribution
posted on 01.01.2014, 00:00 authored by Paresh Narayan, Susan SharmaSusan Sharma, W Poon, Joakim WesterlundJoakim Westerlund
In this paper, we test whether oil price predicts economic growth for 28 developed and 17 developing countries. We use predictability tests that account for the key features of the data, namely, persistency, endogeneity, and heteroskedasticity. Our analysis considers a large number of countries, shows evidence of more out-of-sample predictability with nominal than real oil prices, finds in-sample predictability to be independent of the use of nominal and real prices, and reveals greater evidence of predictability for developed countries.

History

Journal

Energy economics

Volume

41

Pagination

137 - 146

Publisher

Elsevier

Location

Amsterdam, The Netherlands

ISSN

0140-9883

eISSN

1873-6181

Language

eng

Publication classification

C1 Refereed article in a scholarly journal; C Journal article

Copyright notice

2014, Elsevier