Oil and Unemployment in Germany

Andreas Löschel and Ulrich Oberndorfer

No 08-136, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: In this paper, we analyze oil price impacts on unemployment for Germany. Firstly, we survey theoretical and empirical literature on the oil-unemployment relationship and relate them to the German case. Secondly, we illustrate this issue within the framework of a vector autoregression (VAR) approach for Germany. For this purpose, we use three different specifications in order to adequately address the uncertainty related to the construction of an adequate oil variable. Using monthly data from 1973 to 2008, we show that oil price increases induce a rise in unemployment in the German labor market. Moreover, for a restricted sample period for post-unification Germany, we oppose claims that the oil to macroeconomy relationship has weakened since the 1980s. However, our results suggest that it has become more important to construct adequate measures of oil price variables.

Keywords: oil price; unemployment; Germany (search for similar items in EconPapers)
JEL-codes: E24 Q43 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-ene, nep-lab and nep-mac
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Citations: View citations in EconPapers (7)

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Journal Article: Oil and Unemployment in Germany (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:7526

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