How are Fuel Prices Linked to Fiji’s Macroeconomy?

Authors

Joel Abraham, Fijian Competition and Consumer CommissionFollow
Prof. Paresh K. Narayan, Monash University - AustraliaFollow

Document Type

Article

Abstract

Understanding how well the fuel market (or its prices) are linked to a country’s macroeconomy has both fiscal and monetary policy coordination implications. This note attempts to provide an understanding of how shocks from the fuel market impact the macroeconomy and vice versa. Our results are novel: we show that Fiji’s macroeconomy only absorbs a maximum of 31% of shocks from the system, implying that most movements in the macroeconomy are due to fundamentals and not the fuel market. The key policy message is that pricing behavior and any price controls associated with the fuel market will not have negative macroeconomic connotations.

Recommended Citation

Abraham, Joel and Narayan, Prof. Paresh K. (2023) "How are Fuel Prices Linked to Fiji’s Macroeconomy?," Bulletin of Monetary Economics and Banking: Vol. 26: No. 3, Article 2.
DOI: https://doi.org/10.59091/2460-9196.2106
Available at: https://bulletin.bmeb-bi.org/bmeb/vol26/iss3/2

First Page

437

Last Page

444

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

Australia

Affiliation

Monash University