The Impacts of Oil Price Fluctuations on Revealed Comparative Advantage of Manufacturing Commodities for ASEAN-5 Economies

This paper attempts to quantify the effects of oil price fluctuations on revealed symmetric comparative advantage (RSCA) for 95 manufacturing commodities of 5 ASEAN countries from 1991 to 2012. Using Zellner's (1962) seemingly unrelated regression (SURE) model, oil price fluctuations negatively affect RSCA of more than 60% of the manufacturing commodities estimated. This is true especially for low-technology (LT1 & LT2) and medium-technology (MT3) commodities. The paper also found that endowment variables such as labour and capital stock significantly affects RSCA for more than 50% of the equations, giving support to Ricardian  and Heckscher-Ohlin theorem of comparative advantage.  Keywords: Revealed Comparative Advantage; Oil Price Shocks; International Trade JEL Classifications: C33; F11; N5

Oil price shocks: A comparative study on the impacts of oil price movements in Malaysia and the UK economies

The study investigates the relationship between changes in crude oil prices and Malaysia and the UK macro-economy. A multivariate VAR analysis is carried out among five key macroeconomic variables: real gross domestic product, short term interest rate, real effective exchange rates, long term interest rate and money supply. From the VAR model, the impulse response functions reveal that oil price movements cause significant reduction in aggregate output and increase real exchange rate. The variance decomposition shows that crude oil prices significantly contribute to the variability of real exchange rate long term interest rate in the Malaysia economy while oil price shocks are found to have significant effects on money supply and short term interest rate in the UK economy. Despite these macro-econometric results, caution must be exercised in formulating energy policies since future effects of upcoming oil shocks will not be the same as what happened in the past. Explorations and development of practicable alternatives to imported fuel energy will cushion the economy from the repercussions of oil shocks

The impacts of oil price fluctuations on revealed comparative advantage of manufacturing commodities for ASEAN-5 economies

This paper attempts to quantify the effects of oil price fluctuations on revealed symmetric comparative advantage (RSCA) for 95 manufacturing commodities of 5 ASEAN countries from 1991 to 2012.Using Zellner’s (1962) seemingly unrelated regression (SURE) model, oil price fluctuations negatively affect RSCA of more than 60% of the manufacturing commodities estimated. This is true especially for low-technology (LT1 & LT2) and medium-technology (MT3) commodities.The paper also found that endowment variables such as labour and capital stock significantly affects RSCA for more than 50% of the equations, giving support to Ricardian and Heckscher-Ohlin theorem of comparative advantage

Oil & natural resource economics

This paper surveys the history of the oil industry with a particular focus on the events associated with changes in the price of oil from the perspectives of oil production and oil reserves. The discussions include Hotelling’s theory on economics of non-renewable resource, peak oil theory, Hubbert’s curve and prediction on future oil production and reserves based upon the recent developments in the world supply of oil

FORECASTING CRUDE OIL PRICE USING ARIMA AND FACEBOOK PROPHET WITHI MACHINE LEARNING

Oil price forecasting has received a great deal of attention from practitioners and researchers alike, but it remains a difficult topic because of its dependency on a variety of factors, including the economic cycle, international relations, geopolitics, and so on. Forecasting the price of oil is a difficult but gratifying task. Motivated by this issue, we present a robust model for accurate crude oil price forecasting using ARIMA and PROPHET models based on machine learning technique to produce a reliable weekly and monthly crude oil price predictions. We apply the Savitzky Golay smoothing filter to get a better denoising performance for our forecast models. For model evaluation, we apply cross validation with sliding windows on both models and compares the performances using RMSE and MAPE. The results shows that the ARIMA- based machine learning approach performs better as compared to the PROPHET model for both one-week and one-month forecast ahead intervals

Effects of palm oil price on exchange rate: A case study of Malaysia and Indonesia

This paper investigates the impact of palm oil prices on exchange rates in Malaysia and Indonesia using the Dynamic Ordinary Least Squares (DOLS) model. The paper uses real monthly data from 1983:1 to 2015:5 and follows three estimation steps: (i) determination of the integrational properties of the data, (ii) testing for co integration relationship through bounds testing method, and (iii) estimating the long run impact of real palm oil price, real crude oil price and real interest rate differential on real exchange rate. The finding indicates that real palm oil prices have significant negative effects on real exchange rate. While coefficient estimates differ for Malaysia and Indonesia, however, they tend to be around 0.2. In other words, a 10% increase in the real price of palm oil leads to appreciation of about 2% in the equilibrium exchange rate in Malaysia and Indonesia. The findings confirm that an increase in palm oil price leads to exchange rate appreciation

The corporate social responsibility overview.

Corporate Social Responsibility (CSR) is a tool for companies to show their commitment towards social issues when the corporate involvement could strengthen the continuity and company’s operation while at the same time to show their existence in the community. Essentially, CSR is corporate involvement in social activities in which their role is very important to improve the quality of social life in terms of education, health and environmental sustainability

Low savings rates in the economic community of West African States (Ecowas): The role of the political instability-income interaction

This paper employs PCSE, OLS and TSLS with random effects to investigate the impact of the political instabilityincome interaction on savings in ECOWAS countries during the period 1996-2012.The empirical evidence illustrates that higher political stability is associated with higher savings and income levels moderate the adverse effect of political instability on savings, indicating that the impact of political instability on savings is higher in low income ECOWAS countries, but lesser at higher levels of income. The paper recommends the promotion of political stability via increases in incomes to raise savings in the ECOWAS region

Is Facebook PROPHET superior than hybrid ARIMA model to forecast crude oil price?

Oil price forecasting has received a great deal of attention from practitioners and researchers alike, but it remains a difficult topic because of its dependency on a variety of factors, including the economic cycle, international relations, and geopolitics. Forecasting the price of oil is a difficult but gratifying task. Motivated by this issue, we present a robust model for accurate crude oil price forecasting using ARIMA and Prophet models based on machine learning technique to produce a reliable weekly and monthly crude oil price predictions. We apply the Savitzky–Golay smoothing filter to get a better denoising performance for our forecast models. For model evaluation, we apply cross validation with sliding windows on both models and compares the performances using RMSE and MAPE. The results show that the ARIMA-based machine learning approach performs better as compared to the Prophet model for both one-week and one-month forecast ahead intervals

The inflation targeting as a nominal anchor in South African monetary policy: Does the monetary policy becomes more effective?

The paper investigates whether the South African Inflation Targeting (IT) framework has performed the role of the nominal anchor in the economy or not as well as the process through which the monetary authority determine its monetary instrument in the economy. Using the Generalized Method of Moments (GMM) estimators, the baseline and augmented forward-looking monetary policy rules were estimated for the pre, post-IT adoption and full sample periods. The findings vary across regimes.The result prior to the adoption of the IT framework does not follow the IT principles, whereas that of the post IT adoption and full sample periods are characterized as a forward-looking IT rule.The paper further uses the augmented monetary policy rule to identify the factors that determine the monetary policy instrument in South Africa.The results confirm that the South African monetary economy practiced full-pledged IT principle immediately after the adoption of the IT framework and that the monetary policy rule serve as a nominal anchor for the South African economy.The policy implication is that the South African Reserve Bank should further strengthen the IT framework adopted in the economy in order to continue keeping inflation to the required single digit target