RMB Internationalization and Energy Prices: Evidence for Co-integration, Causality and Interaction Relationship
Fenghua Wen1, 2, Mi Deng2, Yuning Cai2, Cheng Peng3, Eimear Zhang1, Yong Tang1, *
1 School of Business, Hunan City University, Yiyang, Hunan 413049, China
2 School of Business, Central South University, Changsha, Hunan 410083, China
3 School of Mathematics and Statistics of Central South University, Changsha, Hunan, 410083,China
Abstract
Objective:
Energy pricing in the international energy market is the key point for RMB internationalization, which can make the process further developed.
Aim:
Therefore it is of practical significance to study their co-integration relationship and causality, and though the impulse response to analyze their dynamic interaction relationship.
Method:
We take the Johansen co-integration and VAR model to explore the interaction between them.
Results:
Empirical results show that, firstly there is a long-term equilibrium between RMB internationalization and energy prices, and the change of short-term energy prices have a positive impact on the RMB internationalization index. Secondly, WTI oil price, domestic oil price and domestic coal price linearly Granger cause the RMB internationalization, but not vice versa. While RMB internationalization is only the Granger cause of the international coal price. Finally, the impulse response analysis shows that changes of energy prices play positive roles in promoting the internationalization of RMB.
Keywords: RMB Internationalization, Energy Prices, Energy Invoicing, Petro-dollar system.
Article Information
Article History:
Received Date: 22/02/2017
Revision Received Date: 07/03/2017
Acceptance Date: 19/05/2017
Electronic publication date: 25/07/2017
Collection year: 2017
© 2017 Wen et al.
open-access license: This is an open access article distributed under the terms of the Creative Commons Attribution 4.0 International Public License (CC-BY 4.0), a copy of which is available at:
https://creativecommons.org/licenses/by/4.0/legalcode. This license permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
* Address correspondence to this author at the School of Business, Hunan City University, Yiyang, Hunan, China; Tel: 15874882888; E-mails: mailtowfh@126.com, dengmi0711@163.com
Open Peer Review Details |
Manuscript submitted on 22-02-2017 |
Original Manuscript |
RMB Internationalization and Energy Prices: Evidence for Co-integration, Causality and Interaction Relationship |