Analysis of the relationship between oil price fluctuations and inflation in the Libyan economy

Abstract

The main aim of this study is to investigate the nature of relationship between oil price fluctuations and local inflation level in Libya during the period 1987-2021. In order to achieve its objective, the study adopted Hansen parameter instability cointegration test and DOLS method. The findings of the study indicated a long run positive relationship between oil price fluctuations and local inflation level in Libya.