Unit:
Specialty Financial Analysis and PolicyLibrary of the Faculty of Economics and of the Faculty of Business Administration
Author:
Dougkas Konstantinos
Supervisors info:
Κωστελέτου Νικολίνα, Ομότιμη Καθηγήτρια, Τμήμα Οικονομικών Επιστημών, Εθνικό και Καποδιστριακό Πανεπιστήμιο Αθηνών.
Original Title:
Τιμές ενέργειας και οικονομική δραστηριότητα: Ελλάδα, Ιταλία, Ισπανία, Πορτογαλία.
Translated title:
Energy prices and economic activity: Greece, Italy, Spain, Portugal.
Summary:
The paper will investigate the relationship between energy prices and economic activity in Southern European countries. Various extensions of this scientific approach have been successfully investigated in the past. More specifically, the purpose of the paper is to test the impact of oil, electricity, and gas prices on income (GDP) fluctuations and thus investigate the relationship between energy prices and economic growth. The motivation for this research is the recent increase in energy prices and their direct impact on inflation with as yet unknown effects on economic growth and employment. In the past, the oil crisis of 1973 and 1978 led to global recession and stagflation.
First, a detailed description of the relevant literature will be provided. Through the literature review, the relationship between oil prices and commodity prices will be examined, as well as the effect of oil prices on economic growth. Also, through the literature we establish whether increases in oil prices caused increases in product prices, and whether this had an effect on the product.
Next, the paper focuses on the case study, for 4 countries in the Southern Eurozone (Greece, Spain, Italy, Portugal, Spain). The time period considered is the period 2008-2019. The data used are monthly. Instead of GDP, as an indicator of economic activity we use the industrial production index for which reliable monthly data are available from Eurostat. The relationship between energy prices and the industrial production index is investigated by analyzing the VAR model on a country-by-country basis.
The empirical investigation starts with the presentation of descriptive statistics data for the data used, followed by a stationarity test, a test of cointegration, a causality test and concludes with the estimation of the VAR model and Granger causality from which we draw our conclusions. Perhaps the main conclusion of our study is that the four countries of the Southern Eurozone that we select in our sample are very different. It is not possible to draw common conclusions about the impact of the prices of different forms of energy on industrial activity. Therefore, if common energy policies are implemented, they will have completely different effects in each country.
Main subject category:
Social, Political and Economic sciences
Keywords:
Gas prices, Oil prices, Electricity prices, Industrial production index, Economic activity, GDP, Inflation, VAR, Greece, Spain, Italy, Portugal, ADF, Granger causality test.
