Asymmetric impact of oil price on current account balance: Evidence from oil importing countries

Lei Chang, Muhammad Mohsin, Zhennan Gao and Farhad Taghizadeh-Hesary

Energy Economics, 2023, vol. 123, issue C

Abstract: This study investigates the asymmetric linkage between oil price and current account balance (CAB) in ten oil-importing emerging countries by employing a unique “Quantile-on-Quantile” methodology. The estimations reveal that the oil price is adversely related to CAB in selected economies at various quantiles of data distribution. The findings suggest that the impact of oil prices on CAB is asymmetric, with increases having a more significant negative effect than decreases having a positive effect. Furthermore, the effect of oil prices on CAB is more significant for net oil importers that have a higher dependency on oil imports. Finally, the findings highlight the need for policymakers in oil-importing countries to recognize the non-linear relationship between oil prices and CAB.

Keywords: Oil price; Current account balance; Quantile-on-Quantile estimation; Oil importing countries (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:123:y:2023:i:c:s0140988323002475

DOI: 10.1016/j.eneco.2023.106749

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