Global Impacts Of Oil Price Shocks
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Global Impacts Of Oil Price Shocks
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Author : Saeed Moshiri
language : en
Publisher:
Release Date : 2022
Global Impacts Of Oil Price Shocks written by Saeed Moshiri and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with categories.
Oil price shocks impact the global economy, but the effects are not alike across the countries. While higher oil prices are beneficial to oil-exporting countries, they are harmful to economic performance of oil-importing countries. The opposite is also true for the lower oil prices. Nonetheless, international trade may mitigate the direct impacts of oil price shocks on both groups of countries. While the literature on the direct impact of oil price shocks on either oil-exporting or oil-importing countries is rich, the studies on the indirect impacts are limited. In this paper, we set up an empirical model to estimate the direct and indirect effects of oil price shocks on 30 major net oil-exporting and net oil-importing countries that comprise more than 73 percent of the world's economy. We use bilateral trade matrix to construct the spillover variables and estimate the indirect impact of oil price chocks. To control for institutional variations across the countries, we divide each group of the oil-exporting and oil-importing countries into two developed and developing groups. The estimation results for the period 1980-2015 show that all oil-importing countries are adversely affected by rising oil prices, but trade has mitigated the effect in developed countries. The impact of positive oil price shocks on developing oil-exporting countries is positive, but the trade has reduced the effect. However, the effect of the shocks on developed oil-exporting countries is not significant.
Measuring Oil Price Shocks Using Market Based Information
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Author : Tao Wu
language : en
Publisher: DIANE Publishing
Release Date : 2010-10
Measuring Oil Price Shocks Using Market Based Information written by Tao Wu and has been published by DIANE Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-10 with Technology & Engineering categories.
The authors study the effects of oil-price shocks on the U.S economy combining narrative and quantitative approaches. After examining daily oil-related events since 1984, they classify them into various event types. They then develop measures of exogenous shocks that avoid endogeneity and predictability concerns. Estimation results indicate that oil-price shocks have had substantial and statistically significant effects during the last 25 years. In contrast, traditional vector auto-regression (VAR) approaches imply much weaker and insignificant effects for the same period. This discrepancy stems from the inability of VARs to separate exogenous oil-supply shocks from endogenous oil-price fluctuations driven by changes in oil demand. Illustrations.
Oil Prices And Inflation Dynamics Evidence From Advanced And Developing Economies
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Author : Sangyup Choi
language : en
Publisher: International Monetary Fund
Release Date : 2017-09-05
Oil Prices And Inflation Dynamics Evidence From Advanced And Developing Economies written by Sangyup Choi and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-09-05 with Business & Economics categories.
We study the impact of fluctuations in global oil prices on domestic inflation using an unbalanced panel of 72 advanced and developing economies over the period from 1970 to 2015. We find that a 10 percent increase in global oil inflation increases, on average, domestic inflation by about 0.4 percentage point on impact, with the effect vanishing after two years and being similar between advanced and developing economies. We also find that the effect is asymmetric, with positive oil price shocks having a larger effect than negative ones. The impact of oil price shocks, however, has declined over time due in large part to a better conduct of monetary policy. We further examine the transmission channels of oil price shocks on domestic inflation during the recent decades, by making use of a monthly dataset from 2000 to 2015. The results suggest that the share of transport in the CPI basket and energy subsidies are the most robust factors in explaining cross-country variations in the effects of oil price shocks during the this period.
The Differential Effects Of Oil Demand And Supply Shocks On The Global Economy
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Author : Mr.Paul Cashin
language : en
Publisher: International Monetary Fund
Release Date : 2012-10-23
The Differential Effects Of Oil Demand And Supply Shocks On The Global Economy written by Mr.Paul Cashin and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-10-23 with Business & Economics categories.
We employ a set of sign restrictions on the generalized impulse responses of a Global VAR model, estimated for 38 countries/regions over the period 1979Q2–2011Q2, to discriminate between supply-driven and demand-driven oil-price shocks and to study the time profile of their macroeconomic effects for different countries. The results indicate that the economic consequences of a supply-driven oil-price shock are very different from those of an oil-demand shock driven by global economic activity, and vary for oil-importing countries compared to energy exporters. While oil importers typically face a long-lived fall in economic activity in response to a supply-driven surge in oil prices, the impact is positive for energy-exporting countries that possess large proven oil/gas reserves. However, in response to an oil-demand disturbance, almost all countries in our sample experience long-run inflationary pressures and a short-run increase in real output.
On The Sources And Consequences Of Oil Price Shocks
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Author : Deren Unalmis
language : en
Publisher: International Monetary Fund
Release Date : 2012-11-08
On The Sources And Consequences Of Oil Price Shocks written by Deren Unalmis and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-11-08 with Business & Economics categories.
Building on recent work on the role of speculation and inventories in oil markets, we embed a competitive oil storage model within a DSGE model of the U.S. economy. This enables us to formally analyze the impact of a (speculative) storage demand shock and to assess how the effects of various demand and supply shocks change in the presence of oil storage facility. We find that business-cycle driven oil demand shocks are the most important drivers of U.S. oil price fluctuations during 1982-2007. Disregarding the storage facility in the model causes a considerable upward bias in the estimated role of oil supply shocks in driving oil price fluctuations. Our results also confirm that a change in the composition of shocks helps explain the resilience of the macroeconomic environment to the oil price surge after 2003. Finally, speculative storage is shown to have a mitigating or amplifying role depending on the nature of the shock.
Oil And The International Economy
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Author : Georg Koopmann
language : en
Publisher: Transaction Publishers
Release Date :
Oil And The International Economy written by Georg Koopmann and has been published by Transaction Publishers this book supported file pdf, txt, epub, kindle and other format this book has been release on with Business & Economics categories.
The oil price increases of the 1970s left deep marks on the world economy. They led to a massive redistribution of income in favor of oil-producing countries, and caused serious disruption of growth, imbalances in foreign trade, and problems of stability in oil-importing countries. Despite the present levelling off, the authors suggest that more price increases remain a distinct possibility. "Oil and the International Economy "examines the effects of rising oil prices on the international financial system and identifies ways that oil-importing countries can overcome the financial and adjustment problems caused by them. The authors project the long-term trend in real oil prices and present economic policy options to help avoid future financial problems for industrialized and developing nations alike. Contents: The World Oil Market after the Oil Price Shocks; Future Trends in the Demand for Oil; Future Trends in the Supply of Oil; Balance-of-Payments and Exchange-Rate Adjustment: Current Account Developments in Times of Rising Oil Prices and Effects on Exchange Rates; The Effects of Real Oil Price Increases on Energy and Raw Material Prices; Repercussions on the General Price Level; Implications for the German Monetary and Exchange Rate Policy; Are Real Oil Price Increases a Brake on Growth?; Options for Economic Policy; The Struggle for Markets in the Oil-Producing Countries; The Oil-Producing Countries as Competitors in the Manufacturing Sector; Consequences for Trade Between Oil-Importing Countries.
Taking Stock
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Author : Diego A. Cerdeiro
language : en
Publisher: International Monetary Fund
Release Date : 2017-05-04
Taking Stock written by Diego A. Cerdeiro and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-05-04 with Business & Economics categories.
The effect that the recent decline in the price of oil has had on growth is far from clear, with many observers at odds to explain why it does not seem to have provided a significant boost to the world economy. This paper aims to address this puzzle by providing a systematic analysis of the effect of oil price shocks on growth for 72 countries comprising 92.8% of world GDP. We find that, on net, shocks driving the oil price in 2015 shaved off 0.2 percentage points of growth for the median country in our sample, and 0.17 percentage points in GDP-weighted terms. While increases in oil supply and shocks to oil-specific demand actually boosted growth in 2015 (by about 0.2 and 0.4 percentage points, respectively), weak global demand more than offset these gains, reducing growth by 0.8 percentage points. Counterfactual simulations for the 72 countries in our sample underscore the importance of diversification, rather than low levels of openness, in shielding against negative shocks to the world economy.
Essays On The Macroeconomic Effects Of Oil Price Shocks On The U S Economy
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Author : Romita Mukherjee
language : en
Publisher:
Release Date : 2011
Essays On The Macroeconomic Effects Of Oil Price Shocks On The U S Economy written by Romita Mukherjee and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
A large volume of research has acknowledged the role of oil price shocks to generate a significant stagflationary impact on U.S. and other oil importing nations. Recent research however shows a paradigm shift in this oil price-macroeconomy relationship since the mid 1980s, during which the U.S. economy has been relatively resilient to oil shocks. Both output contraction and inflationary expectations have been milder in the post mid 1980s than before. But the 2007-08 oil shock episode has re-emphasized the immense impact of the ebbs and flows of oil prices on the U.S. economys ups and downs. Global oil price peaked at $148 a barrel in June 2008. With the mortgage crisis and credit crunch, oil was another blow too many. The U.S. economy swamped into one of the greatest recessions of all times. According to Hamilton (2009), the 2007-08 oil shock had a significant contribution to the recent recession. While a lot of work have been done on the effects of oil price shocks on the U.S. economy, relatively little work has investigated what triggers oil price increase. My research illustrates why it is important to study the cause of an oil price rise. First, the effects of oil price rise on the macro variables depend heavily on what causes the shock. Secondly, whereas the oil price hikes of the 1970s and early 1980s can mostly be attributed to exogenous events in OPEC (Arab Oil Embargo, Iran-Iraq War, Iranian Revolution), a significant source of oil price spikes in the post mid 1980 era have been an increase in global oil demand confronting stagnating oil production. From a policy perspective, of course, policies aimed at dealing with higher oil prices must take careful account of what causes oil prices to rise. Empirical research that demonstrates the resilience of U.S. economy to oil price shocks builds on the implicit assumption that as oil price varies, everything else in the global economy is held constant. Thus all variations in oil prices are taken as alike and exogenous. This overlooks the possibility that oil price rise sparked off by diverse events can potentially lead to different repercussions. This thesis is an attempt to develop framework to study the endogenous increase in oil price. The oil price increase arises from increase in U.S. growth rate, increase in foreign growth rate and a purely exogenous oil supply shock by OPEC. The most important result is that the source of oil price rise has changed after the mid 1980s - whereas before the mid 1980s, bulk of the variation in oil price was due to supply shocks by OPEC, post mid 1980s, most of the variation in oil price is explained by increase in U.S. and foreign growth. Furthermore, if the origin of the oil price rise is the same, then the responses of most U.S. macroeconomic variables display remarkable similarity in the pre and post mid 1980s. This result gives us a new way to look at the resilience of the U.S. economic activity to oil price rise since the mid 1980s. The resilience can be explained to a significant extent by the fact that the type of shocks resulting in oil price rise has changed.
Oil Prices And Bank Profitability
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Author : Mr.Heiko Hesse
language : en
Publisher: International Monetary Fund
Release Date : 2009-10-01
Oil Prices And Bank Profitability written by Mr.Heiko Hesse and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009-10-01 with Business & Economics categories.
This paper analyzes the relationship between oil price shocks and bank profitability. Using data on 145 banks in 11 oil-exporting MENA countries for 1994-2008, we test hypotheses of direct and indirect effects of oil price shocks on bank profitability. Our results indicate that oil price shocks have indirect effect on bank profitability, channeled through country-specific macroeconomic and institutional variables, while the direct effect is insignificant. Investment banks appear to be the most affected ones compared to Islamic and commercial banks. Our findings highlight systemic implications of oil price shocks on bank performance and underscore their importance for macroprudential regulation purposes in MENA countries.
Oil Price Shocks Market Response And Contingency Planning
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Author : George Horwich
language : en
Publisher: American Enterprise Institute
Release Date : 1984
Oil Price Shocks Market Response And Contingency Planning written by George Horwich and has been published by American Enterprise Institute this book supported file pdf, txt, epub, kindle and other format this book has been release on 1984 with Business & Economics categories.