Interactions between business conditions, economic growth and crude oil prices

The aim of this thesis is to search for empirical relationship between business conditions and crude oil prices using time series analysis. Business conditions have been peroxide by real income and real industrial production as advised in the relevant literature. Results suggest that economic activity and industrial value added are in long term relationship with oil price movements in the selected countries. Gross domestic product and industrial production significantly are affected from oil prices worldwide. Real income and industrial value added converge to their long term paths significantly through the channel of oil price movements. Oil prices have negative impact on business activity in some countries while it has positive impact in some other countries. Therefore, the sign of coefficient of oil prices has been found mixed in this research study. Keywords: Business Conditions; Oil; Error Correction Model.