Do U.S. Monetary Policy Shocks Raise Oil Prices and Excess Stock Premiums in Oil-Exporting Countries?

Szilárd Benk and Max Gillman

Corvinus Economics Working Papers (CEWP) from Corvinus University of Budapest

Abstract: This study examines how U.S. monetary policy shocks influence global asset prices by tracing their effects through real oil prices and the excess stock returns of oil-exporting nations. We show that expansionary U.S. monetary policy raises real oil prices, which in turn increase excess stock premiums in countries dependent on oil exports. These resource-driven wealth effects intensify geopolitical dynamics between the United States and major oil-exporting economies. Building on structural VAR frameworks that incorporate global oil market fundamentals, we augment the model with U.S. monetary variables, including money supply, inflation expectations, and measures of monetary policy uncertainty. Our results provide robust evidence that monetary-policy-induced oil price shocks elevate excess stock returns in oil-exporting nations, thereby identifying a new transmission channel through which U.S. policy actions shape international financial and strategic outcomes.

Keywords: US monetary policy shocks; real oil prices; SVAR; oil exporting nations; excess premiums; US money supply and inflation expectations (search for similar items in EconPapers)
JEL-codes: E31 E51 Q43 (search for similar items in EconPapers)
Date: 2026-01-04
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Persistent link: https://EconPapers.repec.org/RePEc:cvh:coecwp:2026/01

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