All Title Author
Keywords Abstract

Publish in OALib Journal
ISSN: 2333-9721
APC: Only $99

ViewsDownloads

COVID-19 Pandemic, Oil Price Slump and Food Crisis Nexus: An Application of ARDL Approach

DOI: 10.4236/oalib.1106403, PP. 1-19

Subject Areas: Socioeconomics, Sociology

Keywords: COVID-19 Pandemic, Oil Price Slump, Food Crisis, ARDL Approach and VECM Granger Causality

Full-Text   Cite this paper   Add to My Lib

Abstract

The study investigates the impacts of COVID-19 pandemic on crude oil price and global food price index using an autoregressive distributed lag (ARDL) model and vector error correction (VECM) model covering the sample period of 20th January to 31st March 2020. The result from ARDL model indicates strong cointegration relationship among the variables and that crude oil price is negatively and significantly related to COVID-19 pandemic while food price index appeared to be positive and insignificant in the long run period. But in the short run period both crude oil prices and food price index have negative and significant relationship with COVID-19 pandemic. The VECM Granger causality test result revealed that there is long run causality in COVID-19 pandemic equation and that there is also short run unidirectional causality running from crude oil price to COVID-19 pandemic and from food price index to crude oil price. Therefore, it is concluded that the effect of COVID-19 pandemic on crude oil price and food price index is a short run effect and it is recommended that short run workable measures should be applied by OPEC and FAO in order to rescue crude oil price slump and avoid food crisis.

Cite this paper

Musa, K. S. , Maijama’a, R. , Mohammed, N. and Yakubu, M. (2020). COVID-19 Pandemic, Oil Price Slump and Food Crisis Nexus: An Application of ARDL Approach. Open Access Library Journal, 7, e6403. doi: http://dx.doi.org/10.4236/oalib.1106403.

References

[1]  World Health Organization (2020) Novel Coronavirus (2019-nCoV) Situation Reports Parts 1, 20th January 2020. 1-5. https://www.who.int/emergencies/diseases/nevel-coronavirus-2019/situation-reports
[2]  World Health Organization (2020) Novel Coronavirus (2019-nCoV) Situation Reports Part 11, 31st January 2020. 1-5. https://www.who.int/emergencies/diseases/nevel-coronavirus-2019/situation-reports
[3]  World Health Organization (2020) Novel Coronavirus (2019-nCoV) Situation Reports Parts 12, 1st February 2020. 1-7. https://www.who.int/emergencies/diseases/nevel-coronavirus-2019/situation-reports
[4]  World Health Organization (2020) Coronavirus Disease 2019 (2019-nCoV) Situation Reports Parts 40, 29th February 2020. 1-7. https://www.who.int/emergencies/diseases/nevel-coronavirus-2019/situation-reports
[5]  World Health Organization (2020) Coronavirus Disease 2019 (2019-nCoV) Situation Reports Parts 41, 1st March 2020. 1-7. https://www.who.int/emergencies/diseases/nevel-coronavirus-2019/situation-reports
[6]  World Health Organization (2020) Coronavirus Disease 2019 (2019-nCoV) Situation Report 71, 31st March 2020. 1-11. https://www.who.int/emergencies/diseases/nevel-coronavirus-2019/situation-reports
[7]  World Health Organization (2020) Coronavirus Disease 2019 (2019-nCoV) Situation Report 72, 1st April 2020. 1-12. https://www.who.int/emergencies/diseases/nevel-coronavirus-2019/situation-reports
[8]  World Health Organization (2020) Coronavirus Disease 2019 (2019-nCoV) Situation Report 101, 30th April 2020. 1-13. https://www.who.int/emergencies/diseases/nevel-coronavirus-2019/situation-reports
[9]  Global Oil Demand to Decline in 2020 as Coronavirus Weighs Heavily on Markets. https://www.iea.org/news/global-oil-demand-to-decline-in-2020-as-coronavirus-weighs-heavily-on-markets
[10]  Food and Agricultural Organization (2020) Whose Food Security and Livelihoods Are Most at Risk Due to the Pandemic? http://www.fao.org/2019-ncov/en
[11]  Food and Agricultural Organization (2020) Will COVID-19 Have Negative Impacts on Global Food Security? http://www.fao.org/2019-ncov/en
[12]  Food and Agricultural Organization (2020) How Will the Pandemic Affect Food Demand? http://www.fao.org/2019-ncov/en
[13]  Maijama’a, R., Musa, K.S., Garba, A. and Baba, U.M. (2020) Coronavirus Outbreak and the Global Energy Demand: A Case of People’s Republic of China. American Journal of Environmental and Resource Economics, 5, 10-13.
[14]  World Health Organization (2020) Coronavirus Disease 2019 (2019-nCoV) Situation Reports 1-101, Data on the Infected Cases of COVID-19. https://www.who.int/emergencies/diseases/nevel-coronavirus-2019/situation-reports
[15]  Data on Crude Oil Price Is Sourced from Macro Trend Website. https://www.macrotrends.net/2516/wti-crude-oil-prices-10-years-daily-chart
[16]  Food and Agricultural Organization (2020) FAO Food Price Index. http://www.fao.org/worldfoodsituation/foodpricesindex/en
[17]  Musa, K.S., Maijama’a, R., Muhammed, N. and Usman, A. (2020) Crude Oil Price and Exchange Rate Nexus: An Ardl Bound Approach. Open Access Library Journal, 7, e6072. https://doi.org/10.4236/oalib.1106072
[18]  Sims, C.A., Stephen, M.G. and Jeffrey, D.S. (1982) Policy Analysis with Econometrics Models. Brooking Papers on Economic Activity, 13, 107-164. https://www.jstor.org/stable/2534318 https://doi.org/10.2307/2534318
[19]  Pesaran, M.H. and Pesaran, B. (1997) Microfit 4.0. Oxford University Press, Oxford.
[20]  Food and Agricultural Organization (2020) What Are FAO’s Recommendations to Mitigate the Risks of the Pandemic on Food Security and Nutrition? http://www.fao.org/2019-ncov/en

Full-Text


comments powered by Disqus

Contact Us

service@oalib.com

QQ:3279437679

微信:OALib Journal