Trade linkages and macroeconomic effects of the price of oil
Iikka Korhonen and
Svetlana Ledyaeva
No 16/2008, BOFIT Discussion Papers from Bank of Finland, Institute for Economies in Transition
Abstract:
In this paper we assess the impact of oil price shocks on oil-producer and oil-consumer economies. VAR models for different countries are linked together via a trade matrix, as in Abeysinghe (2001). As expected, we find that oil producers (Russia and Canada here) benefit from oil price shocks. For example, a large oil shock, leading to a price increase of 50%, boosts Russian GDP by some 12%. However, oil producers are hurt by indirect effects of oil shocks, as economic activity in their export countries suffers. For oil consumers, the effects are more diverse. In some countries, output drops in response to an oil price shock, while other countries seem to be relatively immune to oil price changes. Finally, indirect effects are also detected for oil-consumer countries. Those countries trading more with oil producers receive indirect benefits via higher demand from the oil producing countries. In general the largest negative total effects from positive oil price shocks are found in China, USA and Japan while European countries seem to fare quite well during recent positive oil-price shocks.
Date: 2008-11-16
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Published in Published in Energy Economics, Vol. 32, Issue 4, July 2010, pp. 848-856
Downloads: (external link)
https://helda.helsinki.fi/bof/bitstream/123456789/8233/1/160509.pdf (application/pdf)
Related works:
Journal Article: Trade linkages and macroeconomic effects of the price of oil (2010) 
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:bof:bofitp:2008_016
Access Statistics for this paper
More papers in BOFIT Discussion Papers from Bank of Finland, Institute for Economies in Transition Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland. Contact information at EDIRC.
Bibliographic data for series maintained by Minna Nyman ().