Globalization or Anti-Globalization: The Unexpected Relationship between Oil Price and Food Price in Green Economy Transition

Abstract

By reviewing the history of “ecological transformation” theory for world economy growth, this research analyzes a relationship between oil price and food price in US dollar value in the context of green economy transition with a big question mark on globalization or anti-globalization. The time series analysis results show their relationship becomes more uncertain when the manners of green economy transition by world main economies are not consensus in complementary cooperation during 1980 to 2019. The oil price in a weaker US dollar value decreases world food price but depending upon an increase of the real exchange rates of US_EU and US_China as a base condition. That leads the world food price and China’s producer price take more uncertain fluctuation in world economy growth. In which, a stronger green economy transformability and a higher cost of China lower the uncertainty of world green economy transition from agricultural to advanced industrial regime. Both stronger Euro and Chinese Yuan are better for lowering food price when oil price change has a higher uncertainty in a weaker US dollar value. A deeper green economic transition for saving oil consumption in US is highly expected to enhance a stronger transformability of world green economy transition for economy growth in the post COVID-19 pandemic for deeper cooperation in globalization.

Keywords: Globalization; Economy transition; Food price; Oil price; Real exchange rate

JEL Classification: E1, H11, O13