<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The impact of structural changes as well as breaks on oil price fluctuations is studied in this article. There are a few channels, such as domestic prices and inflation, that cause the effect of oil price to pass through the economy. The higher crude oil price is immediately followed by the increase in oil products such as gasoline and heating oil. The direct effects continue as people choose alternative energy sources, leading to the increase in price. Besides, the indirect effect on inflation as a result of the behavioral responses of the firms and workers which is known as the “second round” effects in which higher wages is being demanded. This article uses exploratory data analysis to discover the patterns of the variables’ series and then examines the relationship between oil price and consumer price index. Multiple breakpoint test is thereafter used to identify the structural changes in time-varying variables.</p></abstract>

The impact of structural changes as well as breaks on oil price fluctuations is studied in this article. There are a few channels, such as domestic prices and inflation, that cause the effect of oil price to pass through the economy. The higher crude oil price is immediately followed by the increase in oil products such as gasoline and heating oil. The direct effects continue as people choose alternative energy sources, leading to the increase in price. Besides, the indirect effect on inflation as a result of the behavioral responses of the firms and workers which is known as the “second round” effects in which higher wages is being demanded. This article uses exploratory data analysis to discover the patterns of the variables’ series and then examines the relationship between oil price and consumer price index. Multiple breakpoint test is thereafter used to identify the structural changes in time-varying variables.

Multiple Breakpoint Test on Crude Oil Price

Faculty of Management and Information Technology

Foundations of Management

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

{"article-title":"Multiple Breakpoint Test on Crude Oil Price"}

The impact of structural changes as well as breaks on oil price fluctuations is studied in this article. There are a few channels, such as domestic prices and...

Multiple Breakpoint Test on Crude Oil Price

Published Online: Oct 11, 2019

Page range: 187 - 196

DOI: https://doi.org/10.2478/fman-2019-0016

Keywords
breakpoint test, consumer price index, oil price, exploratory data analysis

© 2019 Seuk Wai Phoong et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Multiple Breakpoint Test on Crude Oil Price

Published Online: Oct 11, 2019

Page range: 187 - 196

DOI: https://doi.org/10.2478/fman-2019-0016

Keywordsbreakpoint test, consumer price index, oil price, exploratory data analysis

© 2019 Seuk Wai Phoong et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
breakpoint test, consumer price index, oil price, exploratory data analysis