Assessing the Impact of the Oil Price Shocks on Economic Growth in Oil-Exporting Arab Countries

Abstract

The role of oil and gas in the modern economy is undeniable. That is why oil-exported countries have a good chance to wealth. But if the economy doesn't have diversification or there is no political stability this revenue cannot become welfare for the long run. As well as the changing of oil prices doe in the world market can impact the revenues of oil-exported countries. The purpose of the research is to assessthe impact of the oil price shocks on economic growth in oil-exporting Arab countries. As a methodology, there were chosen VAR models and Granger causality tests. The practical importance of the research is to predict economic growth in other oil-exporting countries. The authors came to the conclusion that oil-price change has positive impacts on GDP growth in oil-rich Arab countries and there is the strong dependency from oil prices. The originality and scientific novelty of the research connected with this argue that oil revenues have impacts on economic growth only in economic and political stability.