Global Implications of Lower Oil Prices

Aasim Husain, Rabah Arezki, Peter Breuer, V. Haksar, Thomas Helbling, Paulo Medas and Martin Sommer

No 2015/015, IMF Staff Discussion Notes from International Monetary Fund

Abstract: The sharp drop in oil prices is one of the most important global economic developments over the past year. The SDN finds that (i) supply factors have played a somewhat larger role than demand factors in driving the oil price drop, (ii) a substantial part of the price decline is expected to persist into the medium term, although there is large uncertainty, (iii) lower oil prices will support global growth, (iv) the sharp oil price drop could still trigger financial strains, and (v) policy responses should depend on the terms-of-trade impact, fiscal and external vulnerabilities, and domestic cyclical position.

Keywords: SDN; price decline; windfall gain; oil exporter; price drop; price pass-through; Oil price; fuel taxes and subsidies; fiscal vulnerabilities; external vulnerabilities; exchange rate regime; economic activity; monetary policy; Oil prices; Oil; Fuel prices; Energy prices; Energy subsidies; Global (search for similar items in EconPapers)
Pages: 41
Date: 2015-07-14
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Citations: View citations in EconPapers (58)

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