Relation between oil and GDP: The case of Kazakhstan.Assesment of economic situation and economic development of Kazakhstan based on the economy of oil
|Author:||Mgr. Vyacheslav Pushkarev|
|Year:||2013 - summer|
|Leaders:|| † Ing. Zdeněk Hrubý CSc.
|Work type:|| Economic Theory
|Awards and prizes:|
|Abstract:||This Master thesis is devoted to research of the economic development of Kazakhstan
based on the economy of oil.
This study is an attempt to analyze the relationship between oil price, GDP, inflation and
oil exports in Kazakhstan on the basis of quarterly data from 2000Q1 to 2010Q4. We
explored the role of oil price for the Kazakhstani economy by using time-series Vector
Error Correction Model (VECM) approach. Moreover, we applied the Johansen
cointegration test to examine the sensitivity of economic growth to changes of oil prices
in the long term. The key result shows that oil price shock has no significant impact on
real economic growth in Kazakhstan. However, the price of oil has significantly positive
effect on GDP in the short-term.
In addition, we investigated a relationship between FDI and economic growth of
Kazakhstan. Foreign direct investment plays a significant role in the development of
republic. For the analysis we used the annual data for the period 1993 to 2011 (almost
from the period of independence of Kazakhstan). Regression analysis of Ordinary Least
Square (OLS) was used in analyzing the data. Based on the empirical results, the analysis
shows that there is a positive relationship between the FDI and economic growth. Our
findings confirmed that Kazakhstan as a new developing economy attracts FDI to
country. However care should be taken when attracting FDI, because the investment
potential of the republic largely based on natural resources.