Oil Price Declines Could Hurt U.S. Financial Markets: The Role of Oil Price Level

Ha Nguyen, Huong Nguyen, and Anh Pham
Authors registered in the RePEc Author Service: Ha Nguyen

The Energy Journal, 2020, vol. Volume 41, issue Number 5, 1-22

Abstract: This paper investigates the causal effects of oil price fluctuations on United Statesý financial markets using daily oil price and financial market data from 2011 to 2016. To address endogeneity, we follow the heteroscedasticity-based identification strategy by Rigobon (2003) and instrument for changes in oil prices with exogenous shocks on current and future oil supply. We find that a decline in oil price negatively affected markets after 2014 when oil price was very low, but not before 2014 when the price was relatively high. These novel findings suggest oil price level could affect the impact of a decrease in oil prices on financial markets.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.iaee.org/en/publications/ejarticle.aspx?id=3550 (text/html)
Access to full text is restricted to IAEE members and subscribers.

Related works:
Journal Article: Oil Price Declines Could Hurt U.S. Financial Markets: The Role of Oil Price Level (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aen:journl:ej41-5-nguyen

Ordering information: This journal article can be ordered from
http://www.iaee.org/en/publications/ejsearch.aspx

Access Statistics for this article

More articles in The Energy Journal from International Association for Energy Economics Contact information at EDIRC.
Bibliographic data for series maintained by David Williams (iaee@iaee.org).