Credit and Oil Consumption

Vipin Arora ()

MPRA Paper from University Library of Munich, Germany

Abstract: Credit greases the wheels of oil consumption—it is prevalent in purchases of cars, trucks, and even the construction of factories. But the traditional view is that it affects oil consumption only through economic activity and the price of oil. I argue that credit is important in its own right. To make my case, I first show that an association between credit and oil consumption growth exists across countries and time. I then give a nod to the traditional view, and conclude by showing that changes in credit alter oil consumption—even after accounting for economic activity and oil prices.

Keywords: credit; oil consumption; economic activity; VAR (search for similar items in EconPapers)
JEL-codes: E51 F39 Q47 (search for similar items in EconPapers)
Date: 2016-02-14
New Economics Papers: this item is included in nep-ene and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:71096

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