Transmission Channels Of Crude Oil Price Shocks On Kenya’s Economy

Achieving a high and stable economic growth is one of the main objectives of any state but oil price fluctuations and its impact on inflation, exchange rate and on other macroeconomic variables may cause difficulties in attaining this goal. This study investigated empirically the channels through which oil price shocks affect economic activity in Kenya. Following existing literature, the study focused on five macroeconomic variables: real exchange rate, inflation, money supply, real GDP growth and international price of crude oil. Existing quarterly data from the first quarter of 1991 to the l…