The Oil Price-Macroeconomy Relationship and its Historical Changes(in Japanese)

Akira Maeda

ESRI Discussion paper series from Economic and Social Research Institute (ESRI)

Abstract: This paper analyzes the macroeconomic impact of high oil prices on various national economies. Using an analytical model, I show that oil price-real GDP/nominal price elasticities can be estimated roughly from current oil prices, GDP, and oil imports and exports. In contrast to large-scale modeling, my approach is based on simple algebra and clear assumptions, and thus provides policy makers with a more transparent view of the vulnerability of economies to oil price increases, in terms of both GDP and domestic price levels; my model shows how this vulnerability declined sharply in the late-1980s and stayed low through the 1990s, and how the Euro-zone countries are becoming more vulnerable while Japan remains less so.

Keywords: World crude oil; Price elasticity; GDP; Consumer prices. (search for similar items in EconPapers)
Pages: 38 pages
Date: 2005-05
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Persistent link: https://EconPapers.repec.org/RePEc:esj:esridp:142

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