Globalization or Anti-Globalization: The Unexpected Relationship between Oil Price and Food Price in Green Economy Transition

An inquiry into misgovernance in globalization vs. anti-globalization aims to understand why the ‘world factory’ has a relative lower world pricing impact and animates in the history of ‘ecological transformation’ theory for world economy growth in green economy transitions from old-industrial to advanced-industrial regime during 1980–2019. This analysis reveals that oil price in a weaker US dollar value unexpectedly decreases world food prices but in the manner of depending upon an increase in real exchange rates on the US dollar values relative to the Euro and RMB as the base terms of trade, so that further forces the China producer price to undertake a higher production cost and lets EU members undertake a higher inflation rate. A critique on that is to clearly understand that the counter-acting effects of external uncertainty in world growth are against each initial domestic plan for green transformability and forces all world trade partners to cooperate against the expected loss of the weakened US dollar values. These necessary but reluctantly complementary cooperations are highly likely to make each sovereign money value towards a similar misgovernance equifinality undertake the cost burden of contractionary depreciation in the US dollar values. Hence a possible solution is to cooperate to lower the costs of world growth, particularly to assist the world factory to work against a further world loss caused by the weaker US dollar values in order to strengthen globalization in next period.

PurposeThis paper aims to investigate the relationship between oil price shocks and world food prices between 1974 and 2018.Design/methodology/approachThe authors use the SVAR model to disentangle the oil price into supply, aggregate demand and oil-specific demand shocks and apply the detrended cross-correlations analysis to measure the association between oil price shocks and food returns/volatility and analyze contagion effects between oil and food markets.FindingsThe results show that the correlations between oil and food prices depend on whether oil prices changes are driven by supply or demand shocks. Particularly, food returns (volatility) are positively (negatively) more dependent on the oil price changes driven by aggregate demand (oil specific demand) shocks. Further analysis dealing with contagion analysis between oil and food markets shows a contagion effect during the food crisis of 2006–2008. Oil-specific demand shocks are the main source of this phenomenon.Research limitations/implicationsThis study differentiates itself from the previous literature by simultaneously disentangling oil price into supply, aggregate demand and oil-specific demand-driven shocks and evaluating the cross-correlations between each shock type and food returns/volatility. Specifically, this study has the originality of detecting the main source of contagion effects between oil and food markets over the food crisis of 2006–2008.Practical implicationsThe results of this study are important for policymakers and investors. They should account for the oil price fluctuations differently depending on whether the oil price shocks are driven by the demand or supply side. Moreover, they should anticipate an increase (decrease) in food prices due to a positive (negative) oil shock. In addition, special attention should be accorded to the world oil demand. Finally, when a food crisis occurs, markets operators should focus more on the specific oil-demand shocks, as it is the most contributor to possible contagion effects between oil and food markets.Originality/valueThis study differentiates itself from the previous literature by simultaneously disentangling oil price into supply, aggregate demand and oil-specific demand-driven shocks and evaluating the cross-correlations between each shock type and food returns/volatility. Specifically, this study has the originality of detecting the main source of contagion effects between oil and food markets over the food crisis of 2006–2008.

The present paper analyses the relations between food and oil prices for Malaysia using a nonlinear autoregressive distributed lags (NARDL) model. The bounds test of the NARDL specification suggests the presence of cointegration among the variables, which include the food price, oil price and real GDP. The estimated NARDL model affirms the presence of asymmetries in the food price behavior. Namely, in the long run, we find a significant relation between oil price increases and food price. Meanwhile, the long run relation between oil price reduction and the food price is absent. Furthermore, in the short run, only changes in the positive oil price exert significant influences on the food price inflation. With the absence of significant influence of oil price reduction on the food price both in the long run and in the short run, the role of market power in shaping the behavior of Malaysia’s food price is likely to be significant.

Massive Open Online Courses (MOOCs) are a new phenomenon globally and in Africa. MOOCS have attracted student registration in hundreds of thousands per course in certain instances, as well as gaining acceptance across different societies. MOOCs present opportunities for learning in general and specifically learning towards green economy transition in Africa. Many MOOCs are currently hosted by institutions of higher education in the USA, with the first MOOC breakthrough entitled “Artificial Intelligence” having ‘exploded’ at Stanford University in California (USA) in summer 2011. The “Artificial Intelligence” enrolled 160,000 students, 23,000 of which graduated after 10 weeks. The question then is: are MOOCs feasible in educating African masses in the field of green economy transition? Born in 2008 and popularised throughout the years following the global financial crisis, world leaders confirmed from Rio+20 that green economy transition is the way to go if humanity is to remain sustainable on planet earth. This paper presents MOOCs as an emerging area with opportunities to enhance learning for green economy transition in general and specifically for Africa. The twin phenomena under discussion require massive roll outs of: firstly, learning management systems like MOOCs, and, secondly, the dissemination of massive appropriate content, knowledge and skills related to green economy transition that current formal education systems will not manage given the demand and urgency. The answer to the question raised is therefore a qualified ‘yes’ mainly due to limited e-readiness in the continent.

The relationship between energy price and food price has been dominated by co-movement debate among empirical submissions. However, these are widely criticized based on economic structure and uncertain economic events. In this paper, using data spanning from January 2000 to September 2019, we applied asymmetric and partial structural change models to examine the impact of oil price on food prices in Nigeria. Results from the asymmetric model showed that positive margins in crude oil price reduce the price of food, while negative margins co-move with food price in the long-run. The story is different in the short-run, where both positive and negative changes in oil price exert positive effects on food price. Thus, margins in the oil price are a source of incentives/disincentives to stabilize food price through supply channels in Nigeria. However, results of the partial structural change regression suggest that, in isolation, oil price co-moves with food price in regimes 1 and 4 (slump in oil price), while the impact is negative during regimes 2 and 3 (stable oil price). Therefore, the paper argues that the relationship between food price and oil price depends on timely events and the structure of the economy in question, and accounting for these events (regimes) improves timely and appropriate policies on food security and price stability.

Objective - This study analyzes the dynamic relationship between crude oil price and food security related variables (crude palm oil price, exchange rate, food import, food price index, food production index, income per capita and government development expenditure) in Malaysia using a Vector Auto Regressive (VAR) model. Methodology/Technique - The data covered the period of 1980-2014. Impulse response functions (IRFs) was applied to examine what will be the results of crude oil price changes to the variables in the model. To explore the impact of variation in crude oil prices on the selected food security related variables forecast error variance decomposition (VDC) was employed. Findings - Findings from IRFs suggest there are positive effects of oil price changes on food import and food price index. The VDC analyses suggest that crude oil price changes have relatively largest impact on real crude palm oil price, food import and food price index. This study would suggest to revisiting the formulation of food price policy by including appropriate weight of crude oil price volatility. In terms of crude oil palm price determination, the volatility of crude oil prices should be taken into account. Overdependence on food imports also needs to be reduced. Novelty - As the largest response of crude oil price volatility on related food security variables food vouchers can be implemented. Food vouchers have advantages compared to direct cash transfers since it can be targeted and can be restricted to certain types of products and group of people. Hence, it can act as a better aid compared cash transfers. Type of Paper - Empirical Keywords: Crude oil price, Food security related variables, IRF, VAR, VDC

Asymmetric causality in quantiles analysis of the oil-food ‏ ‏nexus since the 1960s

Time-frequency causality and connectedness between oil price shocks and the world food prices

Time-frequency contained co-movement of crude oil and world food prices: A wavelet-based analysis

Tail dependence risk and spillovers between oil and food prices

Do food and oil prices co-move?

This article considers the tools that form the organizational and financial basis for the green economy transition and the features of their application. Currently, most countries of the world have taken a course towards the green economy transition to ensure a decent life for society while preserving the environment. The study aims at seeking the most effective tools for managing such a transition in a certain order and on time. The article dwells on the state regulation of environmentally oriented industries and support for green investments, as well as social orientation towards the environment. A special emphasis is laid on market-based instruments for financing the development of the green economy, including green bonds. The authors of the article have presented a model of transition to green growth with minimum losses for commodity-exporting countries using special financial instruments that ensure the green economy transition for enterprises in the fuel and energy complex. They also have formed proposals for improving the regulatory potential of environmental legislation and the main objects influenced by the state environmental policy.

This study examines the relationship between economic growth and environmental degradation in Nepal through the lens of the Environmental Kuznets Curve (EKC) hypothesis, with particular focus on the country's green economy transition initiatives. Using time series data from 1990 to 2022, we analyze the dynamic relationship between GDP per capita, carbon dioxide emissions, deforestation rates, and key green economy indicators, including renewable energy adoption and sustainable agriculture practices. Our findings reveal a modified EKC pattern specific to Nepal's unique geographical and economic context, where the turning point occurs at a lower income level compared to developed nations due to early adoption of green technologies and policies. The results indicate that Nepal's proactive green economy policies, including hydroelectric power development and community forestry programs, have contributed to decoupling economic growth from environmental degradation earlier than predicted by traditional EKC models. The study provides empirical evidence supporting Nepal's green economy transition strategy and offers policy recommendations for sustaining this trajectory while addressing remaining environmental challenges.

(ProQuest: ... denotes formulae omitted.)1.IntroductionWorldwide ethanol production has more than quadrupled since 2000 with the U.S. and Brazil leading in production (RFA n.d.a). Brazil, who has been a long time global leader in ethanol production, attributes its main reason to the high oil prices in the 1970s (Dias de Moraes 2007). Other countries who boosted their production in the mid-2000 justified their decision based on ethanol's positive impact on rural development, reducing reliance on unfriendly nations for energy, and environmental stewardship (Rosill°Calle & Johnson 2010), the last of which is often criticized because of the perceived negative energy balance of ethanol. The United States, with the help of government support (e.g., capital investment, blenders' subsidies, and tariffs), surpassed Brazil to become the leading producer of ethanol in 2006. Besides the negative energy balance of ethanol production, one of the major criticisms against ethanol is the impact on food prices. Since 2000, world food prices have more than doubled (World Bank n.d.).The high food prices, especially in poor countries, led to calls to curtail ethanol production (Grunwald 2008; Sharma 2008), and subsequently triggered many studies to examine the relationship between the ethanol market and the food market. Monteiro, et al. (2012) studied the impact of ethanol production in the U.S. and Brazil on food prices by focusing on the 1980-2007 time period. They found the share of Brazilian ethanol in the world market, the value of the U.S. dollar, and the price of oil have significantly affected food prices. Literature reviewed by Armah, et al. (2009) attributes the rise in food prices to increased energy cost, the devaluation of the U.S. dollar, and the increased energy demand by developing countries such as India and China. Other studies have found the price of ethanol to be influenced by food and energy prices (Serra, et al. 2011a; Serra, et al. 2011b; Kristoufek, et al. 2012), confirming a connection between the food and ethanol markets.In response to the outcry against ethanol production, policies such as import tariffs and blenders' subsidies have been discontinued in the U.S., and ethanol use mandates have been reduced in the U.S.1 and Europe (Taylor 2013 & Kenny 2014). Although ethanol production in the U.S. and Brazil has slowed as a result of these policy changes, it increased more than 9% from 2012 to 2014, while food prices dropped by nearly 14% over the same time period. Moreover, from 2012 to 2014, energy prices fell by more than 7%, which begs the question, is ethanol production responsible for high food prices? The purpose of our study is to investigate the impact of U.S. and Brazilian ethanol production on global food prices by estimating food demand and food supply equations simultaneously. We include data from 1980 to 2014 and control for the increased demand for food by developing countries due to improving economies and increasing populations, the depreciation of the U.S. dollar, energy prices, and technological advancement in agricultural production.2.Ethanol Production in the U.S. and BrazilThe U.S. and Brazil are the leading producers of ethanol in the world, accounting for over 80% of production (RFA). In response to the higher oil prices in the early 1970s, Brazil embarked on a massive ethanol production program. Policies implemented in Brazil include mandatory blending, capital subsidies, flex-fuel vehicle subsidies, and a 20% import tariff (Monteiro et al. 2012). Production has grown from about 0.16 billion gallons in the mid-1970s to 6.2 billion gallons in 2014 (RFA). In addition to the government programs, the success of Brazilian ethanol production is owed to the abundant supply of sugarcane, a very cost- and environmentally-efficient feedstock. Brazil is now a leader in sugarcane-based ethanol production. Currently, pure gasoline (i.e. zero ethanol blend) is no longer available in Brazil (Rico 2008). …

This study focused on the relationship between oil and food prices in developing oil‐exporting countries. Annual data sets of 31 developing oil‐exporting countries were employed. The study covered a period of 13 years, spanning 2001–2013. Given the mixed stationarity processes of the variables of interest, we adopted a panel autoregressive distributed lag (ARDL) approach, proposed by Pesaran et al. (2001, Journal of Applied Econometrics, 16, 289). The bound test cointegration showed a long‐run cointegration to exist between food prices and oil price in the sample countries. The long‐run result showed positive and significant effects of oil price on food prices while the short‐run effect was also positive but insignificant. We therefore conclude that oil price has a long‐run positive effect on food price and recommend that developing oil‐exporting countries should formulate long‐term agricultural policies to insulate their economies from any global food crisis that may result from oil price changes.