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A Quantitative Study of the Interactions between Oil Price and Renewable Energy Sources Stock Prices

Goran Dominioni (), Alessandro Romano () and Chiara Sotis ()
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Goran Dominioni: Rotterdam Institute of Law and Economics, Erasmus University Rotterdam, 3062 PA Rotterdam, The Netherlands
Alessandro Romano: Yale Law School, Yale University, New Haven, CT 06520, USA
Chiara Sotis: Department of Geography and Environment, London School of Economics and Political Science, London WC2A 2AE, UK

Energies, 2019, vol. 12, issue 9, 1-11

Abstract: In this article, we apply an integrable nonautonomous Lotka–Volterra model to study the relationship between oil and renewable energy stock prices between 2006 and 2016. The advantage of this innovative approach is that it allows us to study the simultaneous interaction among n stock indices at any point in time. In line with previous studies, we find that the relationship between oil and renewables is characterized by major structural breaks taking place in 2008 and around 2013. The first structural break might be caused by the financial crisis, whereas more studies are required to advance a hypothesis on the causes behind the second structural break. Our main finding is that oil is always in a predator–prey relationship with wind, whereas it proceeds in mutualism with solar after 2012. Moreover, we find that solar and wind proceed in mutualism between 2008 and 2013 but have a rivalrous interaction before (competition) and after (predator–prey) that period. We explore the possible reasons behind these patterns and their policy implications.

Keywords: Lotka–Volterra; oil prices; renewable energy (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2019
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