EconPapers    
Economics at your fingertips  
 

News Shocks in Open Economies: Evidence from Giant Oil Discoveries

Rabah Arezki (), Valerie Ramey () and Liugang Sheng ()

No 20857, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper explores the effect of news shocks on the current account and other macroeconomic variables using worldwide giant oil discoveries as a directly observable measure of news shocks about future output–the delay between a discovery and production is on average 4 to 6 years. We first present a two-sector small open economy model in order to predict the responses of macroeconomic aggregates to news of an oil discovery. We then estimate the effects of giant oil discoveries on a large panel of countries. Our empirical estimates are consistent with the predictions of the model. After an oil discovery, the current account and saving rate decline for the first 5 years and then rise sharply during the ensuing years. Investment rises robustly soon after the news arrives, while GDP does not increase until after 5 years. Employment rates fall slightly for a sustained period of time.

JEL-codes: E00 F32 F41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-ias, nep-mac and nep-opm
Date: 2015-01
Note: EFG IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39) Track citations by RSS feed

Published as Rabah Arezki & Valerie Ramey & Liugang Sheng, 2015. "News Shocks in Open Economies: Evidence from Giant Oil Discoveries," IMF Working Papers, vol 15(209).
Published as Rabah Arezki & Valerie A. Ramey & Liugang Sheng, 2017. "News Shocks in Open Economies: Evidence from Giant Oil Discoveries," The Quarterly Journal of Economics, Oxford University Press, vol. 132(1), pages 103-155.

Downloads: (external link)
http://www.nber.org/papers/w20857.pdf (application/pdf)

Related works:
Journal Article: News Shocks in Open Economies: Evidence from Giant Oil Discoveries (2017) Downloads
Working Paper: News Shocks in Open Economies; Evidence from Giant Oil Discoveries (2015) Downloads
Working Paper: News Shocks in Open Economies: Evidence from Giant Oil Discoveries (2015) Downloads
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:nbr:nberwo:20857

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w20857

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2019-04-22
Handle: RePEc:nbr:nberwo:20857