Oil Shocks through International Transport Costs: Evidence from U.S. Business Cycles

Hakan Yilmazkuday

No 1105, Working Papers from Florida International University, Department of Economics

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% during periods of oil crises.

Keywords: Business Cycles; Monetary Policy; International Transport Costs (search for similar items in EconPapers)
JEL-codes: E32 E52 F41 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2011-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://casgroup.fiu.edu/pages/docs/3501/1311369604_11-05.pdf First version, 2011 (application/pdf)

Related works:
Working Paper: Oil shocks through international transport costs: evidence from U.S. business cycles (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:fiu:wpaper:1105

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