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The purpose of this study is to empirically analyse the fiscal revenue implications for oil-dependent African countries in the face of low-carbon energy transition (LET).

The study combined the novel fully modified ordinary least squares, dynamic ordinary least squares and canonical cointegrating regressions estimators to analyse secondary data between 1990 and 2020 for the three major oil-dependent African Countries (Algeria, Angola and Nigeria).

The result shows that LET reduces oil revenue and non-revenue for specific countries (Algeria, Angola and Nigeria) and the panel, suggesting that low-carbon energy transiting is lowering the fiscal revenue of oil-dependent African nations.

The seeming weakness of this study is its inability to broaden the scope to include all oil-producing African economies. However, since the study selected Africa’s top three oil-producing states, the sample can serve as a model for others with lesser crude oil outputs.

Oil-dependent African countries must urgently engage in sincere economic diversification in sectors like industry and manufacturing, the service sector and human capital development to promote economic transformation that will enhance fiscal revenue.

With the pace of energy transition towards low-carbon energy, it is not business as usual for oil-rich African countries (Algeria, Angola and Nigeria) due to fluctuating demand and price. As a result, it becomes worthy to examine how the transition is affecting oil-dependent economies in Africa. Also, this study’s method is unique as it has not been used in a similar study for Africa.

The main purpose of this paper is to investigate the dynamic effects of the oil price shocks on Iran’s inflation in the period 1993:2–2018:2

The main purpose of this paper is to investigate the dynamic effects of the oil price shocks on Iran’s inflation in the period 1993:2–2018:2 using the time-varying parameter vector autoregressive (TVP-VAR) model. The dynamics of the results enable us to study the amount and severity of the impact of the oil price shocks on inflation with the distinction of the sanctioned and non-sanctioned periods. The volume of oil export is used to identify the effective oil sanctions. The period is divided into sanctioned and non-sanctioned periods by Markov switching model.

The results show that the pass-through of oil price shocks into Iran’s inflation are time-varying, and there are significant differences at sanction period from other time horizons. An increase in oil price has a positive effect on inflation and its effects are stronger during the sanctions period. It is also observed that the producer price index is more sensitive to changes in the oil price than the consumer price index. The necessity of the government’s earnest efforts to improve international relations to lift the sanctions, along with diversification of exports, and making the economy of Iran independent of oil revenues is obvious.

In addition to the exogenous oil price shocks, Iran’s economy faces numerous restrictions for its oil exports due to the sanctions. The main purpose of this paper is to investigate the dynamics effects of the oil price shocks on Iran’s inflation in the period 1993:2–2018:2 using the time-varying parameter vector autoregressive (TVP-VAR) model. The dynamics of the results enable us to study the amount and severity of the impact of the oil price shocks on inflation with the distinction of the sanctioned and non-sanctioned periods. The volume of oil export is used to identify the effective oil sanctions.

Oil price shocks greatly impact the global economy, but the effects vary among countries. While higher oil prices benefit oil-exporting countries, they harm the economic performance of oil-importing nations, and vice versa for lower oil prices. However, economic relations, such as trade, can mitigate the impacts of oil price shocks on both groups. In this paper, the authors aim at estimating the effects of oil price shocks on the major net oil-exporting and net oil-importing countries while accounting for international trade.

The authors derive a reduced form of a macro model and set up a Panel VAR model to estimate the direct and indirect impacts of oil price shocks on economic growth. The sample includes data on macroeconomic variables from 30 oil-exporting and oil-importing countries that comprise more than 73 percent of the world's economy. The authors construct the spillover variables using bilateral trade matrix. To control for institutional and structural variations across the countries, they are divided into four groups of developed and developing oil-exporting and oil-importing countries.

The results reveal that all oil-exporting countries have significantly benefited from oil price shocks, although trade has dampened the effect. The positive growth effect has been more pronounced in oil-exporting developing countries. The impact of oil price shocks on oil-importing countries has been negative with a one-year delay, but not statistically significant, and trade has only had a small effect. The effect has been more substantial in oil-importing developing countries.

One of the limitations of this study is the focus on trade as the main spillover channel. Given the data availability, other channels such as foreign investment and financial markets can also be included in future studies.

Removing trade restrictions would help both oil-exporting and oil-importing countries to mitigate the negative impacts of the oil price shocks. However, the asymmetric oil-macroeconomy relationship across oil-exporting and oil-importing countries puts oil-exporting countries in a more vulnerable position as they cannot rely on trade with oil-importing countries to reduce the negative impacts of lower oil prices on their growth. Therefore, it is crucial for oil-exporting countries to reassess their oil-dependent development plans and invest their oil revenues in non-oil sectors to diversity their economies and prepare for a future with reduced dependence on oil.

The recent technological advances, structural changes, and increasing energy efficiency suggest that major oil-importing countries will become less dependent on oil in near future. As a result, oil-exporting countries will also need to undergo structural changes in order to sustain their income level. These significant changes will have important social implications, particularly in the labor market, during the transition, for which preparation will be necessary.

While the literature on the total impact of oil price shocks on either oil-exporting or oil-importing countries is rich, studies on their spillover impacts are limited. Recent research has shown that trade and migration can affect the impact of oil price shock on the economy in federated countries such as Canada. However, the trade effect on oil price shocks in the international level, where countries are subject to different regulations/restrictions and institutional variations, remains scarce. By considering the trade relationship between different groups of oil-exporting and oil-importing countries, the authors aim to contribute to the literature of the global impacts of oil price shocks on the world economy.

The authors empirically aim to study the implications of uncertainty generated by oil price volatility on some key macroeconomic variables, including production, exchange rates and interest rates, of both oil-exporting and oil-importing countries. Using a block exogeneity structural Vector Auto Regression (VAR) model that mutes the effects of domestic variables on global factors and that is suitable for small open economies because of significant differences in the responses of domestic production in oil-importing countries will most likely decrease through reducing planning horizons, postponing investment projects and relocating resources more inefficiently.

The authors integrated into the structural vector autoregressive (SVAR) model the block exogeneity feature since all the countries in this study are small open economies that cannot influence the global economic variables. The block exogeneity feature imposes the restriction that the domestic variables have neither a contemporaneous nor a lagged impact on the global variables. This model has eight variables: oil price volatility, world demand and federal funds rate as the global variables; and domestic production, monetary aggregate, inflation rate, exchange rate and interest rate as domestic variables. The authors assemble the data for 12 developing countries for which the necessary data for the analysis are available: six oil exporting countries (Russia, Saudi Arabia, Iran, Kazakhstan, Mexico and Colombia) and six oil importing countries (Turkey, India, Philippines, Poland, South Africa and Indonesia).

The results point out significant differences in the responses of macroeconomic variables to oil price volatility shocks between oil-exporting and oil-importing countries. Furthermore, the local currencies of these countries depreciate due to concerns about possible current account worsening. In response to the shock, domestic interest rates are reduced so as to alleviate the negative exposure of the shock on domestic economic activity. While domestic production in some oil-exporting countries (i.e. Russia, Saudi Arabia and Iran) increases during oil price uncertainty; in some other countries (i.e. Mexico, Kazakhstan and Colombia), domestic production decreases.

Several components of the study contribute to its novelty. One of them is the period under consideration. The time frame that encompasses the most significant geopolitical and financial events, such as the Middle East Spring and the global financial crisis of 2007–2008. The research was conducted using the block-exogeneity SVAR model, which includes 12 oil exporting and importing developing countries. With this model, the global dynamics, particularly the energy market, that these nations may influence and are influenced by, i.e. global and nonglobal factors can be constrained. This makes it easy to determine the various effects prices have on macroeconomic variables.

1. Oil prices and volatility still matter to the global economy

2. Monetary and fiscal policy interventions in response to oil price volatility create uncertainty and impede investment activity

3. The response of macroeconomic variables to volatility shocks in oil prices varies across oil importers and exporters

4. Interest rates help stabilize production in oil-importing economies that have well-functioning financial markets

Oil prices and volatility still matter to the global economy

Monetary and fiscal policy interventions in response to oil price volatility create uncertainty and impede investment activity

The response of macroeconomic variables to volatility shocks in oil prices varies across oil importers and exporters

Interest rates help stabilize production in oil-importing economies that have well-functioning financial markets

This study aims to investigate the determinants of Islamic stock returns listed on Jakarta Islamic Index (Indonesia) between 2008 and 2018.

This study uses a quantile bounded autoregressive distributed lag (QBARDL) model to uncover relevant relationships.

This study finds that the Dow Jones Islamic Market Index, gold returns, world oil prices and exchange rates are the determinants of the Indonesia’s Islamic stock returns. However, the relationship is time varying developing intra-/inter-quantile bounded.

Integration of the Islamic stock returns with the real economic indicators changes over time. The findings have important implications for the policymakers, the fund managers and the investors to anticipate consequences when considering the macroeconomic conditions before participating in the Indonesian Islamic stock market.

Using a QBARDL, this study finds that the Islamic stock returns have on net and “time-varying intra-/inter-quantile developing” relationship with its determinants as data quantiles progressed from 25% to 75%.