IIMB Management Review (Jun 2024)

Crude oil price, manufacturing index, and consumer price index: Is there any temporal link in India?

  • Utpal Kumar De,
  • Girijasankar Mallik

Journal volume & issue
Vol. 36, no. 2
pp. 137 – 145

Abstract

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In this paper, the autoregressive distributive lag (ARDL) model is used to examine the impact of global crude oil price on manufacturing output in India and the behaviour of consumer price index. Error correction model, co-integration and multivariate GARCH model models are used for the analysis. ARDL analysis shows a significant relation between consumer price index (CPI) and manufacturing index (MI). Also, a significant inverse relation is established between crude oil price with MI and a positive relation between MI and CPI. Despite an inconsistent short run relation between petrol price with CPI, rising fuel price shows dampening impact on manufacturing output in the long run.

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