Crude Oil Prices, Household Spending and Economic Growth in the ASEAN-4 Region: An Analysis of Nonlinear Panel Autoregressive Distributed Lag


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Authors

  • Wali Aya Rumbia Department of Economics, Universitas Halu Oleo, Kendari 93232
  • Abd Azis Muthalib Department of Economics, Universitas Halu Oleo, Kendari 93232
  • Bakhtiar Abbas Study Program of Management, Sekolah Tinggi Ilmu Ekonomi Enam-Enam, Kendari 93121
  • Pasrun Adam Department of Mathematics, Universitas Halu Oleo, Kendari 93232
  • Heppi Millia Department of Economics, Universitas Halu Oleo, Kendari 93232
  • La Ode Saidi Department of Mathematics, Universitas Halu Oleo, Kendari 93232
  • Muh. Irfandy Azis Department of Accounting, Universitas Borneo Tarakan, Tarakan 77123

Abstract

This paper looks at the long run and short run asymmetric impact of crude oil prices on Indonesia's economic growth. It also assesses whether household spending affects the economic growth in the ASEAN-4 Region (Indonesia, Singapore, Thailand and the Philippines) in the long run and short run. We use, to this end, annual time series data of crude oil prices, household consumption expenditure, and GDP for the period 1967-2018. To analyze the data, we employ a nonlinear panel autoregressive distributed lag model. The test results provide evidence that in the long-run, crude oil prices have an asymmetric impact on economic growth. Every 1% increase in crude oil prices, economic growth rises by 0.42%. Meanwhile, household spending does not affect economic growth in the long-run. Furthermore, in the short run, the test results show the presence of an asymmetric impact of crude oil prices on economic growth. Similarly, in the short run, household spending affects economic growth.Keywords: Crude Oil Prices, Household Spending, Economic Growth, Nonlinear Panel Autoregressive Distributed Lag Model.JEL Classifications: C33, E210, E310, O470.DOI: https://doi.org/10.32479/ijeep.9293

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Published

2020-05-16

How to Cite

Rumbia, W. A., Muthalib, A. A., Abbas, B., Adam, P., Millia, H., Saidi, L. O., & Azis, M. I. (2020). Crude Oil Prices, Household Spending and Economic Growth in the ASEAN-4 Region: An Analysis of Nonlinear Panel Autoregressive Distributed Lag. International Journal of Energy Economics and Policy, 10(4), 437–442. Retrieved from https://www.econjournals.com/index.php/ijeep/article/view/9293

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