International Journal of Social Science & Economic Research
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Title:
IS THERE AN INERTIA EFFECT OF OIL PRICE ON INFLATION LEVELS- A MACROECONOMIC ANALYSIS FOR SOME DEVELOPING COUNTRIES

Authors:
Sovik Mukherjee

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Sovik Mukherjee
Assistant Professor in Economics, Department of Commerce and Management Studies, St. Xavier's University, Kolkata, India

MLA 8
Mukherjee, Sovik. "IS THERE AN INERTIA EFFECT OF OIL PRICE ON INFLATION LEVELS- A MACROECONOMIC ANALYSIS FOR SOME DEVELOPING COUNTRIES." Int. j. of Social Science and Economic Research, vol. 3, no. 9, Sept. 2018, pp. 4951-4966, ijsser.org/more2018.php?id=344. Accessed Sept. 2018.
APA
Mukherjee, S. (2018, September). IS THERE AN INERTIA EFFECT OF OIL PRICE ON INFLATION LEVELS- A MACROECONOMIC ANALYSIS FOR SOME DEVELOPING COUNTRIES. Int. j. of Social Science and Economic Research, 3(9), 4951-4966. Retrieved from ijsser.org/more2018.php?id=344
Chicago
Mukherjee, Sovik. "IS THERE AN INERTIA EFFECT OF OIL PRICE ON INFLATION LEVELS- A MACROECONOMIC ANALYSIS FOR SOME DEVELOPING COUNTRIES." Int. j. of Social Science and Economic Research 3, no. 9 (September 2018), 4951-4966. Accessed September, 2018. ijsser.org/more2018.php?id=344.

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Abstract:
The recent rounds of recession have renewed the fears of consumer price inflation. Theoretically, as oil is used as a direct input for many consumer items it will lead to higher prices for some goods and services. Historically, the "pass through" effect of oil price shocks was very evident during the seventies but disappeared somehow in the eighties. Interestingly, empirical research, however, has not always predicted that oil price shocks leads to a general rise in the price level. In this backdrop, the research question is how variations in global oil prices impacts domestic inflation in a panel data set-up of thirty emerging and developing countries including, India, Pakistan and China during the period 2000 to 2016. The results show that a rise in the global oil prices creates an impact on domestic price inflation. Interestingly, the findings highlight some asymmetric impact of the oil price shocks for Asian and non-Asian countries. The impact of monetary policy has been significant and as a result the oil price shock has declined over the years in the post-globalization era which is something momentous given the current situation.