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An empirical analysis of the conditional causality between economic growth, inflation rate and oil price: evidence from Mena countries

JeanFrançois VERNE
Université   saint-Joseph, BeyroUth.
jean-francois.verne@usj.edu.lb

Carole VERNE
Université Saint-Joseph, Beyrouth.

Abstract:   This paper analyses the conditional    causality during the 1970-2016’period between inflation rate and economic growth through the oil price evolution regarding eighteen MENA countries that are often touched by more or less recurrent armed conflicts. By making the difference between oil  producing  countries  and  non-oil  producing  countries,  we  notice  that,  in the oil producing countries, the causality, which goes from economic growth to inflation rate, is not governed by the oil price evolution while in the non-oil producing countries, the causality between economic growth and inflation rate is bidirectional and conditional to the oil price. Moreover, in the oil producing countries, armed  conflicts  influence  negatively  the  economic  growth  but  in the non-oil producing countries they do not have a significant impact on the economic growth and inflation rate as well.

Key words: Growth; Inflation; Causality; Data Panel; Oil Price; Conflicts

JEL Classification : C33 ; D74 ; E31 ; O47 ; Q41.