The economic impact of the 2014 oil price collapse on Rio de Janeiro: A synthetic control analysis

Caio Ferreira ()
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Caio Ferreira: Universidade do Estado do Rio de Janeiro

Economics Bulletin, 2026, vol. 46, issue 1, 260 - 273

Abstract: This paper evaluates the economic impact of the 2014 oil price collapse on the State of Rio de Janeiro using the Synthetic Control Method and annual data from 1990 to 2021. The synthetic control replicates Rio's pre-shock income path and serves as a counterfactual for the post-2014 period. Results show a persistent decline in GDP per capita relative to the synthetic benchmark, with a peak gap of about 14 percent in 2020. Placebo tests, an in-time falsification, and leave-one-out estimates confirm the robustness of the findings. The evidence provides the first causal estimate of a major commodity-price shock for a Brazilian state and highlights the vulnerability of resource-dependent regional economies.

Keywords: Synthetic Control Method; Commodity Price Shocks; Oil Dependence; Regional Economies; Brazil. (search for similar items in EconPapers)
JEL-codes: O1 R1 (search for similar items in EconPapers)
Date: 2026-03-30
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