EconPapers    
Economics at your fingertips  
 

Oil Prices and Personal Consumption Expenditures: Does the Source of the Shock Matter?

Zeina N. Alsalman and Mohamad Karaki ()

Oxford Bulletin of Economics and Statistics, 2019, vol. 81, issue 2, 250-270

Abstract: This paper studies the effect of structural oil shocks on personal consumption expenditures (PCE). First, we estimate a nonlinear simultaneous equation model, compute impulse responses by Monte Carlo integration, and conduct a test of the symmetry of the impulse response functions. We find that aggregate PCE responds asymmetrically to positive and negative oil‐specific demand shocks. Second, we find that aggregate PCE responds negatively to positive oil demand shocks, while adverse oil supply shocks are of limited effect. Third, we find important heterogeneity in the magnitude, sign and timing of the disaggregate PCE responses to structural shocks in the crude oil market. Our results clearly indicate that the response of PCE to an unexpected oil price increase depends on the source of the oil price shock. Our findings are robust to different nonlinear transformations for the real price of oil.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (8) Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/obes.12276

Related works:
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:bla:obuest:v:81:y:2019:i:2:p:250-270

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0305-9049

Access Statistics for this article

Oxford Bulletin of Economics and Statistics is currently edited by Christopher Adam, Anindya Banerjee, Christopher Bowdler, David Hendry, Adriaan Kalwij, John Knight and Jonathan Temple

More articles in Oxford Bulletin of Economics and Statistics from Department of Economics, University of Oxford Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2022-07-09
Handle: RePEc:bla:obuest:v:81:y:2019:i:2:p:250-270