Aye, Goodness ChiomaDadam, VincentGupta, RanganMamba, Bonginkosi2014-08-052014-08-052014-05Aye, GC, Dadam, V, Gupta, R & Mamba, B 2014, 'Oil price uncertainty and manufacturing production', Energy Economics, vol. 43, pp. 41-47.0140-9883 (print)1873-6181 (online)10.1016/j.eneco.2014.02.004http://hdl.handle.net/2263/41076Given the rapid rise and volatility of oil prices, the paper investigates the effect of oil price uncertainty on the South African manufacturing production using monthly observations covering the period 1974:02 to 2012:12. In addition, we quantify the responses of manufacturing production to positive and negative oil price shocks. We examine the dynamic relationship using a bivariate GARCH-in-mean VAR simultaneously estimated with a full information maximum likelihood technique. The conditional standard deviation of the forecast of the growth of US crude oil imported acquisition cost by refiners is used as ameasure of oil price uncertainty. Our results show that oil price uncertainty negatively and significantly impacts on South Africa's manufacturing production. We also find that the responses of manufacturing production to positive and negative shocks are asymmetricen© 2014 Elsevier B.V. All rights reserved. Notice : this is the author’s version of a work that was accepted for publication in Energy Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Energy Economics, vol. 43, pp. 41-47, 2014. doi : 10.1016/j.eneco.2014.02.004.Oil volatilityVector autoregression (VAR)Bivariate GARCH-in-mean VARManufacturing productionSouth African manufacturing productionPostprint Article