Energy Price Shocks and Financial Market Integration: Evidence from New Keynesian Model

Tarek Ghazouani

International Advances in Economic Research, 2020, vol. 26, issue 1, No 2, 13-32

Abstract: Abstract The purpose of this study is to examine the impact of oil price shocks on economic activity. A dynamic stochastic general equilibrium model was applied to verify the role of international financial integration in a New Keynesian model when the oil price shocks hit the economic system. The key findings show that more financial integration tends to dampen the effect of an increase in the oil price than less financial integration. The sensitivity analysis shows that increased elasticity of substitution between oil and domestic goods allows importing countries to reduce their dependence on oil. Financial integration plays an important role in reducing the oil shock effect.

Keywords: Oil price shocks; Financial integration; New Keynesian model; DSGE (search for similar items in EconPapers)
JEL-codes: E32 F4 Q43 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s11294-020-09767-3 Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:iaecre:v:26:y:2020:i:1:d:10.1007_s11294-020-09767-3

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/11294

DOI: 10.1007/s11294-020-09767-3

Access Statistics for this article

International Advances in Economic Research is currently edited by Katherine S. Virgo

More articles in International Advances in Economic Research from Springer, International Atlantic Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().