Although there are many papers related to macroeconomicvariables with oil prices (see, e.g. Atukeren [5], Ayadi [6], Roeger[38], Trehan [44], Bermingham [7], Oladosu [34]), few papers haveinvestigated macroeconomic and monetary variables together withoil prices. Thus, we not only examine the behavior of macroeconomicvariables but also the monetary variables’ reactions to oilprices. Moreover, different lag-length chosen by the criteria(see, e.g. Akaike [1], Rissanen [37], Schwarz [40], Shibata [41],Hacker and Hatemi-J [16]) are concerns raised by this paper, whichare seldom mentioned in relevant research studies.In this section, we discuss four parts of related literature. Part 1mentions the relationship between oil price and inflation, part 2describes the relationship between oil price and interest rates,part 3 discusses the relationship between oil price andmoney, andthe last section introduces lag-length chosen criteria employed inthis paper.
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