Amidst the COVID-19 outbreak, the breakdown of negotiations between Russia and Saudi Arabia sent yet another shock to capital markets worldwide, resulting in crude prices tumbling by nearly half since the beginning of the ...
The effects on real output are positive, although they take longer to materialize (around four quarters after the shock). We then re-examine the effects of low oil prices on the U.S. economy over different sub-periods using monthly observations on real oil prices, real equity prices and ...
The backdrop against which an oil price shock is occurring is not as severe as it was in 2008-09 when global deleveraging was commencing as jobs were being rapidly destroyed. But the effects of an oil shock on the economy are likely to be greater than the long-run average estimated effect...
betweenoilmarketsandtheglobaleconomy.Someofthekeyinsightsarethattherealpriceofoilisendogenouswithrespecttoeconomicfundamentals,andthatoilpriceshocksdonotoccurceterisparibus.Thismakesitnecessarytoexplicitlyaccountforthedemandandsupplyshocksunderlyingoilpriceshockswhenstudyingtheirtransmissiontothedomesticeconomy.Disentangling...
In other words, shocks to global aggregate demand that increase the real price of oil also negatively affect the U.S. economy. However, in contrast to an oil-specific demand shock or an oil supply shock, the negative effect on the real economy is delayed. Third, the estimated effect of ...
controlofthecountryduringtheIranianRevolution,Iranianoilproductiondeclineddramatically,leadingtohugepriceincreases.Crudeoilpricesincreasedfrom$12.46perbarrelin1978to$35.24in1981.Inaneconomicsense,anoilshockisdefinedasanincreaseofoilpricelargeenoughtocausearecessionorasignificantdeclineinglobaleconomicactivity.The1973and1979...
We investigate oil price shocks' effects and their associated transmission channels on global imbalances.We rely on a Global VAR approach that accounts for trade and financial interdependencies between countries.The nature of the shock—demand or supply-driven—matters in understanding the effects of oi...
The effects on real output are positive, although they take longer to materialize (around 4 quarters after the shock). We then re-examine the effects of low oil prices on the US economy over different sub-periods using monthly observations on real oil prices, real equity prices and real ...
Volatile oil prices can send shockwaves throughout the global economy. Changes in the production and consumption of oil also drive prices. However, oil is not a diamond or caviar—luxury items of limited utility that most can live without. Oil is abundant and in great demand, making its pric...
In this paper, we assess the impact and repercussions of oil price fluctuations on the UK economy. We use an empirical strategy which allows us to decompose oil price changes from the underlying source of the shock. Our results show that the consequences of oil price changes on UK macroeconomi...