The effect of oil price increase; on employment in the industrial sector

Subject Areas : Applied Economics

نادر مهرگان ¹ (ندارد)
محمود حقانی ² (ندارد)
سالار عبدالهی حقی ³ (ندارد)

Received: 2011-06-26 Accepted : 2011-11-01 Published : 2011-12-22

Keywords: industrial sector, energy prices, Employment, Auto Regressive Distributed La, Vector Auto Regressive (VAR) U,

Abstract :

Due to an abundance of energy and human resources; Iran has enjoyed an expansion of its industrial sector. Low energy prices, however has increased the dependency of these industries on cheap energy and increased the production of energy inefficient consumer goods. In this article we examine the relationship between energy prices and industrial employment according to Auto Regressive Distributed Lag Method (ARDL) and Vector Auto Regressive model (VAR). We conclude that there is a meaningful relationship between employment and the overall price of energy, prices of oil products, electricity and natural gas. The results of Vector Auto Regressive (VAR) also confirm the hypothesis that energy price shocks have an impact on the level of industrial employment.