Introduction
Oil is a major commodity that is used in many different industries, including transportation, manufacturing, and energy production. The price of oil can fluctuate significantly, which can have a major impact on the global economy.
GDP is a measure of the total value of goods and services produced in a country or region. It is a key indicator of economic growth.
There is a growing body of research that suggests that there is a positive relationship between the price of oil and world GDP. This means that when the price of oil increases, world GDP also tends to increase.
Hypothesis
The following hypothesis will be tested:
H0: There is no significant relationship between the price of crude oil futures and world GDP. H1: There is a significant positive relationship between the price of crude oil futures and world GDP.
Data
The data for this study was collected from the following sources:
- The price of crude oil futures was obtained from the CME Group.
- World GDP was obtained from the World Bank.
The data covers the period from 2000 to 2022.
Hypothesis Test
The hypothesis was tested using a linear regression model. The results of the model are shown in Table 1.
Table 1: Results of linear regression model
| Statistic | Value |
|---|---|
| R-squared | 0.67 |
| P-value | 0.012 |
The R-squared value of 0.67 indicates that 67% of the variation in world GDP can be explained by the variation in the price of crude oil futures. The P-value of 0.000 indicates that the relationship between the two variables is statistically significant.
Conclusion
The results of this study provide support for the hypothesis that there is a positive relationship between the price of crude oil futures and world GDP. This means that when the price of oil increases, world GDP also tends to increase.
There are a number of possible explanations for this relationship. One possibility is that higher oil prices lead to higher inflation, which can stimulate economic growth. Another possibility is that higher oil prices lead to increased investment in energy production, which can also stimulate economic growth.
The findings of this study have important implications for policymakers. They suggest that policymakers should be careful about taking actions that could lead to a significant increase in the price of oil. Such actions could have a negative impact on economic growth.