US-China Tensions, US Partisan Conflict and Global Oil Prices: Scapegoating or Following the Flag or both?

Jamel Saadaoui

MPRA Paper from University Library of Munich, Germany

Abstract: I explore the relationship between US-China tensions, US partisan conflict and global oil prices over the last 20 years. Using lag-augmented local projections, I find empirical support for both the scapegoating hypothesis and the “following the flag” hypothesis. For the scapegoating hypothesis, a rise of US partisan conflict lead to an increase in US-China tension and a reduction of the global prices of oil in the medium run. For the “following the flag” hypothesis, a rise in US-China tension lead to a reduction of US partisan conflict and a reduction of the global prices of oil in the short run. Overall, I underline a new channel through which the domestic economy can be influenced by geopolitical tensions.

Keywords: US-China Tensions; US Partisan Conflict; Global Oil Prices (search for similar items in EconPapers)
JEL-codes: F4 F5 F6 (search for similar items in EconPapers)
Date: 2025-03-28
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