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Energy and Economic Growth : Does a Rise on Commercial Energy ( Fuel Price ) Have an Impact On Economic Growth ? Evidence for Zambia ( Conference ID : CFP / 113 / 2017 )
| Content Provider | Semantic Scholar |
|---|---|
| Author | Mulenga, Cecilia |
| Copyright Year | 2018 |
| Abstract | The Energy Regulation Board (ERB) recently announced a rise on commercial energy i.e. fuel prices effective October 14 th , 2016. A litre of Petrol costing K13.70 up from K9.87 whiles a litre of Diesel costing K11.40, an increase from K8.59.In addition to this, the IMF struck an alarmist note in its 1 st November assessment of Zambia’s economy. The Fund pointed to recurrent electricity shortages, low exports and weak domestic demand as the main culprits of the economy’s underperformance. Is a raise on commercial energy be regarded as one of the contributing factor to Zambian recent economic outlook? Purpose – The paper aims at analysing econometrically (long and short run) the aforementioned commercial energy adjustment’s response to economic outlook of Zambian economy, combining it with other independent variables such as inflation and unemployment rate. It will further analyse the stability of domestic economy which emerges as the result of price adjustments made on commercial energy using population and trade balance data. Methodology The paper employs macroeconomic models which include, Phillip, Kinked-Demand and Solow to analyse the situation on four variables thus; fuel, inflation, unemployment and economic growth (GDP) and evaluate further econometrically using panel method (in time series), the impact of the change to the economy (GDP) in a short and long run terms through granger causality and cointegration tests (unrestricted). Findings The examined results indicate long run valid relationship among all variables. Short run association ship on the other hand turned out to be significant only on three variables, thus fuel, unemployment and GDP. Cost Push inflation fallouts as a result of increase price on oil due to cost of production from raw materials, currency devaluation and expected/unexpected changes in current laws and regulations. Originality/Value – The 2016 adjustment on fuel price in Zambia brought about concerns and reputed it being the reason to current economic fluctuations on industrial and economic productivity/efficiencies thereby, affecting inflation and growth instability. To support this concern, the paper, calls for solution at macro level using 2001-2016 statistical data on average fuel prices and economic growth. No study in Zambia has yet been conducted to define the impact of this change on the economy in econometric sense, and relates it to macro determinants in time series perspective. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.multiresearch.net/cms/publications/CFP1132017.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
