The distributional effects of oil supply news shocks

Theo Drossidis, Haroon Mumtaz and Angeliki Theophilopoulou

Economics Letters, 2024, vol. 240, issue C

Abstract: This paper uses high frequency data on the distribution of US income to investigate the heterogeneous effects of oil supply news shocks. Using a FAVAR with an external instrument, We show that these shocks have large negative effects on the left and right tail of the distribution. For low income individuals, the effect is driven by a decline in wages and proprietor’s income, while a fall in corporate profits and interest income drives the effect for affluent individuals.

Keywords: Oil shock; Income inequality; FAVAR; External instrument identification (search for similar items in EconPapers)
JEL-codes: C32 E32 Q54 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: The Distributional Effects of Oil Supply New Shocks (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:240:y:2024:i:c:s0165176524002532

DOI: 10.1016/j.econlet.2024.111769

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