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Oil Prices and Consumption across Countries and U.S. States

Andrea De Michelis (), Thiago Ferreira and Matteo Iacoviello ()
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Thiago Ferreira: Federal Reserve Board of Governors

International Journal of Central Banking, 2020, vol. 16, issue 2, 3-43

Abstract: We study the effects of oil prices on consumption across countries and U.S. states, by exploiting the time-series and cross-sectional variation in oil dependency of these economies. We build two large data sets: one with 55 countries over the years 1975-2018, and another with all U.S. states over the period 1989-2018. We then show that oil price declines generate positive effects on consumption in oil-importing economies, while depressing consumption in oil-exporting economies. We also document that oil price increases do more harm than the good afforded by oil price decreases both in the world and in U.S. aggregates.

JEL-codes: E32 F40 Q43 (search for similar items in EconPapers)
Date: 2020
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Working Paper: Oil Prices and Consumption across Countries and U.S. States (2019) Downloads
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