Oil shocks through international transport costs: evidence from U.S. business cycles

Hakan Yilmazkuday

No 82, Globalization Institute Working Papers from Federal Reserve Bank of Dallas

Abstract: The effects of oil shocks on output volatility through international transport costs are investigated in an open-economy DSGE model. Two versions of the model, with and without international transport costs, are structurally estimated for the U.S. economy by a Bayesian approach for moving windows of ten years. For model selection, the posterior odds ratios of the two versions are compared for each ten-year window. The version with international transport costs is selected during periods of high volatility in crude oil prices. The contribution of international transport costs to the volatility of U.S. GDP has been estimated as high as 36 percent during periods of oil crises.

Keywords: Monetary policy; International trade (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-cwa, nep-dge, nep-ene, nep-mac and nep-opm
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Citations: View citations in EconPapers (1)

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Working Paper: Oil Shocks through International Transport Costs: Evidence from U.S. Business Cycles (2011)
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