The scientific tale of the nexus between oil prices, macroeconomic uncertainty and Pakistan's exports to its major trading partners: Insights from advanced methods
You can manage bookmarks using lists, please log in to your user account for this.
Media type:
E-Article
Title:
The scientific tale of the nexus between oil prices, macroeconomic uncertainty and Pakistan's exports to its major trading partners: Insights from advanced methods
Contributor:
Chishti, Muhammad Zubair
Published:
Wiley, 2024
Published in:
International Journal of Finance & Economics (2024)
Language:
English
DOI:
10.1002/ijfe.3009
ISSN:
1076-9307;
1099-1158
Origination:
Footnote:
Description:
AbstractThe recent study aims to analyze the nonlinear dynamic effects of oil price shocks and macroeconomic uncertainty on exports. To achieve this, the study utilizes monthly data from July 2003 to December 2020 on oil prices and macroeconomic uncertainty, examining their impact on Pakistan's exports to its major trading partners. To ensure detailed and robust findings, the study employs various advanced econometric tools, including quantile unit root, cointegration, Granger causality tests, and quantile‐on‐quantile regression (QQR) and wavelet quantile correlation (WQC) techniques. The QQR and WQC estimates reveal diverse and nonlinear effects of oil price shocks and macroeconomic uncertainty on exports, reflecting the complexity of the relationship. While oil price shocks (OP) predominantly hinder exports in most cases, a significant and positive association between OP and exports is also observed. Similarly, macroeconomic uncertainty generally exhibits a significantly adverse influence on exports, but positive impacts are also evident. Furthermore, the quantile Granger causality test confirms the presence of a bidirectional causal relationship between the selected series. Based on the results mentioned above, the study argues that the effects of oil price shocks and economic uncertainty are nonlinear, diverse, and complex. As a result, the study suggests implementing phase‐wise policy recommendations to address these complexities.