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COVID-19 Pandemic, Oil Price Slump and Food Crisis Nexus: An Application of ARDL Approach

2020; Scientific Research Publishing; Volume: 07; Issue: 06 Linguagem: Inglês

10.4236/oalib.1106403

2333-9721

Kabiru Saidu Musa, Rabiu Maijama’a, Nafisa Mohammed, Muktari Yakubu,

COVID-19 impact on air quality

The study investigates the impacts of COVID-19 pandemic on crude oil price and global food price index using an autoregressive distributed lag (ARDL) model and vector error correction (VECM) model covering the sample period of 20 th January to 31 st March 2020.The result from ARDL model indicates strong cointegration relationship among the variables and that crude oil price is negatively and significantly related to COVID-19 pandemic while food price index appeared to be positive and insignificant in the long run period.But in the short run period both crude oil prices and food price index have negative and significant relationship with COVID-19 pandemic.The VECM Granger causality test result revealed that there is long run causality in COVID-19 pandemic equation and that there is also short run unidirectional causality running from crude oil price to COVID-19 pandemic and from food price index to crude oil price.Therefore, it is concluded that the effect of COVID-19 pandemic on crude oil price and food price index is a short run effect and it is recommended that short run workable measures should be applied by OPEC and FAO in order to rescue crude oil price slump and avoid food crisis.