Impact of Global Oil Price Volatility on Inflation in Kenya

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dc.contributor.authorMoragwa, Christine
dc.date.accessioned2024-07-17T13:09:09Z
dc.date.available2024-07-17T13:09:09Z
dc.date.issued2023-10
dc.descriptionMASTER OF SCIENCE, ECONOMICS.
dc.description.abstractInflation rate is one of the main variables in macroeconomics. Changes and overall fluctuations of inflation rate have significant impact on how economic agents make decisions. Oil shocks for decades have had a significant impact on how inflation rises or declines in most economies. The purpose of this study was to evaluate the impact of global oil price volatility on inflation in Kenya. The objectives of the study were to describe the trends in oil prices, oil price volatility, and inflation. The research examined the impact of oil price volatility and oil price volatility, and focuses on the relative importance of each shock in affecting inflation in Kenya. Phillips curve, Monetarist Theory and Quantity Theory of money anchor the research study. The study uses a descriptive, causal and correlational research design. The study used secondary annual data (1970-2022) from World bank, Central Bank of Kenya (CBK), International Monetary Fund (IMF), Oil price data sourced from West Texas Intermediate (WTI) crude oil databases. Unit root tests are conducted on the data using the Augmented Dickey-Fuller (ADF) and Phillips Perron (PP) tests. Data analysis involved trend analysis, correlation analysis, and regression analysis using Structural Vector Autoregressive (SVAR) model. From the SVAR model, Forecast Error Variance Decomposition (FEVD) was conducted. Study concludes that an increase in global oil prices causes a contemporaneous short run influence on the domestic inflation rate in Kenya.The study recommends that Energy and Petroleum Regulatory Commission (EPRA) to institute measures that cushion the economy during oil price fluctuations.
dc.description.sponsorshipSchool of Business and Economics of Daystar University
dc.identifier.citationMoragwa, C., (2023). Impact of Global Oil Price Volatility on Inflation in Kenya: Daystar University, School of Business & Economics
dc.identifier.urihttps://repository.daystar.ac.ke/handle/123456789/4748
dc.language.isoen
dc.publisherDaystar University, School of Business & Economics
dc.subjectGlobal Oil Price
dc.subjectInflation
dc.titleImpact of Global Oil Price Volatility on Inflation in Kenya
dc.typeThesis

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