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With the aim of this project to observe the impact of oil price shocks on macroeconomic indicators, testing for causality between these variables will establish whether or not, oil price changes explain changes in other variables. To carry this out, the VAR/Block Exogeneity Granger Causality Test will be performed. This test will estimate whether the oil price variables will Granger cause the remaining variables in the equation. This is achieved by analysing the p statistic at the relevant significance level. In addition to this, pairwise Granger Causality tests will be estimated. This is when each variable is tested purely against another to see whether one directly Granger causes the other.
One constraint in our economy is time. As a society, we make choices about the allocation of time between work and other pursuits. In the US, most workers are eligible for overtime
Factors Responsible for changes in Aggregate Supply We know that changes in input costs such as wages, oil and other input prices will cause changes in aggregate supply. Most
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