Impact of oil price volatility on economic growth in united states: an ordinary least square analysis

Ismail Abiodun Taiwo 1, *, Latifat Amoke Jayeola 2 and Adewale Samson Adefokun 2

1 Department of Economics, University of Ibadan, Ibadan, Oya State, Nigeria.
2 Department of Finance and Financial Analytics, University of New Haven, West Haven, Connecticut, United States.
 
Review
International Journal of Science and Research Archive, 2024, 13(01), 477–485.
Article DOI: 10.30574/ijsra.2024.13.1.1676
Publication history: 
Received 30 July 2024; revised on 08 September 2024; accepted on 10 September 2024
 
Abstract: 
This study investigates the impact of oil price volatility on economic growth in the United States, while also considering the roles of unemployment rates, interest rates, and inflation. Using a comprehensive dataset and employing various statistical techniques, including summary statistics, correlation analysis, and regression modeling, the study aims to elucidate the relationships between these macroeconomic variables and economic growth. The summary statistics reveal significant variability in oil price volatility, unemployment rates, interest rates, and inflation, all of which influence the economic landscape. The correlation analysis indicates positive associations between GDP and oil price volatility, interest rates, and inflation, while highlighting negative correlations with unemployment rates. The regression analysis further demonstrates that oil price volatility and unemployment rates have statistically significant negative effects on economic growth, whereas interest rates and inflation do not exhibit significant direct effects in the model. The findings underscore the critical impact of oil price stability and labor market conditions on economic performance. Based on these insights, the study recommends policies to mitigate oil price volatility, enhance labor market stability, and foster economic diversification. The results contribute to a deeper understanding of the factors influencing economic growth and offer actionable recommendations for policymakers aiming to promote sustainable economic development
 
Keywords: 
Oil Price Volatility; Unemployment Rate; Interest Rate; Inflation; United Staes
 
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