The Asymmetric Response of Macroeconomic Indicators to Shocks of Oil Price in Yemen
| dc.contributor.author | Dhaif Allah Musaeed Dhaif Allah Al-hamdhi | |
| dc.date.accessioned | 2026-07-21T00:01:47Z | |
| dc.date.issued | 2025 | |
| dc.description | Yemen's economy, which heavily relies on oil revenues, is exposed to the effects, whether negative or positive of oil shocks in the global market. For this reason, this study targeted YEMEN, aiming mainly to examine the asymmetric responses of key macroeco-nomic indicators, namely "gross domestic product, inflation, exchange rate, and the un-employment rate" to shocks of oil prices from 1991 to 2023. Additional aims include the examination of both short and long-run associations among these variables and the shocks of oil prices, and the diagnosis of the "Dutch disease” symptoms in these indica-tors alongside some key economic sectors. To realize this, the nonlinear autoregressive distributed lag (NARDL) and its associated bootstrap NARDL for an augmented analysis of cointegration were adopted. In addition, an OLS regression was used as well for further analysis. According to findings, variables were found to be cointegrated in all models. More specifically, GDP has significant positive short-run association with only negative shocks of oil prices and significant positive long-run association with both negative and positive shocks. Thus, GDP was found to respond asymmetrically to both shocks in both long and short runs. Regarding the inflation rate, Short-term negative shocks were found to be significantly associated with inflation, while positive but negligible associations were found in the long run. Therefore, the asymmetric impact of both shocks was spotted in the short run only. Much like GDP, the exchange rate responded asymmetrically to both shocks in both long and short runs. The association, however, was found to be signif-icantly positive with the positive shocks in the long run, and significantly positive in re-sponse to negative shocks in the short run. As for the unemployment rate, it was noticea-ble that in the long run, the unemployment rate spiked due to negative shocks more than its rise due to positive ones. Thus, its response to oil shocks was asymmetric only in the long run. Additionally, the magnitude of negative oil price vi shocks generally exceeded that of positive ones for all variables. Moreover, the research indicates there is a one-way causal relationship from oil price shocks to the exchange rate, with no evidence of re-verse causation. Lastly, signs of Dutch disease in the Yemeni economy were observed, particularly affecting key indicators like unemployment and the exchange rate. However, the impact was less obvious compared to that in the key non-oil tradable sectors such as agriculture, services, and manufacturing. To address these issues, this study recommends that Yemeni policymakers focus on diversifying revenue sources to reduce dependence on oil. Implementing both short and long-term strategies will be essential to mitigate cur-rent and future economic shocks related to oil price fluctuations. | |
| dc.identifier.uri | https://scholarhub.unimas.my/handle/123456789/1222 | |
| dc.language.iso | English | |
| dc.publisher | UNIVERSITI MALAYSIA SARAWAK | |
| dc.relation.ispartofseries | Faculty of Economics and Business | |
| dc.subject | Asymmetry, NARDL, Augmented ARDL, Oil price shocks, Yemen | |
| dc.title | The Asymmetric Response of Macroeconomic Indicators to Shocks of Oil Price in Yemen | |
| dc.type | PhD |