Is the Relationship Between the Price of Oil and Economic Growth Asymmetrical in Togo?

International Journal of Economics and Management Studies

© 2021 by SSRG - IJEMS Journal

Volume 8 Issue 10

Year of Publication : 2021

Authors : Tchetche Essohouna

10.14445/23939125/IJEMS-V8I10P112

How to Cite?

Tchetche Essohouna, "Is the Relationship Between the Price of Oil and Economic Growth Asymmetrical in Togo?," SSRG International Journal of Economics and Management Studies, vol. 8,  no. 10, pp. 88-96, 2021. Crossref, https://doi.org/10.14445/23939125/IJEMS-V8I10P112

Abstract:

This research examines the effect of oil prices on economic growth in Togo, a low-income oil importing country. In a non-linear NARDL framework, asymmetries are introduced by accumulating oil price increases separately from decreases through the partial sum processes of positive and negative changes. Using annual data for 1980-2017, the results reveal that oil price fluctuations asymmetrically affect the country's economic growth in the short and long run. We observe a larger positive asymmetric effect of lower oil prices on growth than the negative effect of higher prices. The country should benefit from a sustained decrease in oil prices and implement effective energy policies. But implementing a sound economic diversification policy would help move away from dependence on oil to other types of sustainable energy, especially in times of soaring oil prices

Keywords:

Oil price fluctuations, Asymmetric effects, NARDL, Economic growth, Togo.

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