Article · International Journal of Energy Economics and Policy · April 10, 2021

THE IMPACT OF OIL PRICES ON THE FOOD INFLATION IN KAZAKHSTAN

Sabit Baimaganbetov, Dinmukhamed Kelesbayev, Gulzhan Baibosynova, Рима Ибадуллаевна Ерманкулова, 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

Market Dynamics and VolatilityEconomics of Agriculture and Food MarketsMonetary Policy and Economic Impactoil pricesfood inflationfood prices

THE IMPACT OF OIL PRICES ON THE FOOD INFLATION IN KAZAKHSTAN

Abstract

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