The Impact Of Oil Import Price Shocks On Domestic Prices

The Impact Of Oil Import Price Shocks On Domestic Prices PDF

Author: Robert A. Feldman

Publisher: Routledge

Published: 2019-09-06

Total Pages: 192

ISBN-13: 1000230473

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First published in 1982. The sharp increase in the price of imported oil in the early 1970s generated much interest in the economic impact of large oil price hikes and related energy price increases. The main focus is on oil, and Dr. Feldman’s monograph is a needed contribution, revealing the quantitative price impacts of recent oil price shocks in great detail.

The Distributional Implications of the Impact of Fuel Price Increases on Inflation

The Distributional Implications of the Impact of Fuel Price Increases on Inflation PDF

Author: Mr. Kangni R Kpodar

Publisher: International Monetary Fund

Published: 2021-11-12

Total Pages: 34

ISBN-13: 1616356154

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This paper investigates the response of consumer price inflation to changes in domestic fuel prices, looking at the different categories of the overall consumer price index (CPI). We then combine household survey data with the CPI components to construct a CPI index for the poorest and richest income quintiles with the view to assess the distributional impact of the pass-through. To undertake this analysis, the paper provides an update to the Global Monthly Retail Fuel Price Database, expanding the product coverage to premium and regular fuels, the time dimension to December 2020, and the sample to 190 countries. Three key findings stand out. First, the response of inflation to gasoline price shocks is smaller, but more persistent and broad-based in developing economies than in advanced economies. Second, we show that past studies using crude oil prices instead of retail fuel prices to estimate the pass-through to inflation significantly underestimate it. Third, while the purchasing power of all households declines as fuel prices increase, the distributional impact is progressive. But the progressivity phases out within 6 months after the shock in advanced economies, whereas it persists beyond a year in developing countries.

Measuring Oil-Price Shocks Using Market-Based Information

Measuring Oil-Price Shocks Using Market-Based Information PDF

Author: Tao Wu

Publisher: DIANE Publishing

Published: 2010-10

Total Pages: 41

ISBN-13: 1437935583

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The authors study the effects of oil-price shocks on the U.S economy combining narrative and quantitative approaches. After examining daily oil-related events since 1984, they classify them into various event types. They then develop measures of exogenous shocks that avoid endogeneity and predictability concerns. Estimation results indicate that oil-price shocks have had substantial and statistically significant effects during the last 25 years. In contrast, traditional vector auto-regression (VAR) approaches imply much weaker and insignificant effects for the same period. This discrepancy stems from the inability of VARs to separate exogenous oil-supply shocks from endogenous oil-price fluctuations driven by changes in oil demand. Illustrations.

Oil and the International Economy

Oil and the International Economy PDF

Author: Georg Koopmann

Publisher: Transaction Publishers

Published:

Total Pages: 456

ISBN-13: 9781412829946

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The oil price increases of the 1970s left deep marks on the world economy. They led to a massive redistribution of income in favor of oil-producing countries, and caused serious disruption of growth, imbalances in foreign trade, and problems of stability in oil-importing countries. Despite the present levelling off, the authors suggest that more price increases remain a distinct possibility. "Oil and the International Economy "examines the effects of rising oil prices on the international financial system and identifies ways that oil-importing countries can overcome the financial and adjustment problems caused by them. The authors project the long-term trend in real oil prices and present economic policy options to help avoid future financial problems for industrialized and developing nations alike. Contents: The World Oil Market after the Oil Price Shocks; Future Trends in the Demand for Oil; Future Trends in the Supply of Oil; Balance-of-Payments and Exchange-Rate Adjustment: Current Account Developments in Times of Rising Oil Prices and Effects on Exchange Rates; The Effects of Real Oil Price Increases on Energy and Raw Material Prices; Repercussions on the General Price Level; Implications for the German Monetary and Exchange Rate Policy; Are Real Oil Price Increases a Brake on Growth?; Options for Economic Policy; The Struggle for Markets in the Oil-Producing Countries; The Oil-Producing Countries as Competitors in the Manufacturing Sector; Consequences for Trade Between Oil-Importing Countries.

On the Sources and Consequences of Oil Price Shocks

On the Sources and Consequences of Oil Price Shocks PDF

Author: Deren Unalmis

Publisher: International Monetary Fund

Published: 2012-11-08

Total Pages: 41

ISBN-13: 1475598432

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Building on recent work on the role of speculation and inventories in oil markets, we embed a competitive oil storage model within a DSGE model of the U.S. economy. This enables us to formally analyze the impact of a (speculative) storage demand shock and to assess how the effects of various demand and supply shocks change in the presence of oil storage facility. We find that business-cycle driven oil demand shocks are the most important drivers of U.S. oil price fluctuations during 1982-2007. Disregarding the storage facility in the model causes a considerable upward bias in the estimated role of oil supply shocks in driving oil price fluctuations. Our results also confirm that a change in the composition of shocks helps explain the resilience of the macroeconomic environment to the oil price surge after 2003. Finally, speculative storage is shown to have a mitigating or amplifying role depending on the nature of the shock.

Global Impacts of Oil Price Shocks

Global Impacts of Oil Price Shocks PDF

Author: Saeed Moshiri

Publisher:

Published: 2022

Total Pages: 0

ISBN-13:

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Oil price shocks impact the global economy, but the effects are not alike across the countries. While higher oil prices are beneficial to oil-exporting countries, they are harmful to economic performance of oil-importing countries. The opposite is also true for the lower oil prices. Nonetheless, international trade may mitigate the direct impacts of oil price shocks on both groups of countries. While the literature on the direct impact of oil price shocks on either oil-exporting or oil-importing countries is rich, the studies on the indirect impacts are limited. In this paper, we set up an empirical model to estimate the direct and indirect effects of oil price shocks on 30 major net oil-exporting and net oil-importing countries that comprise more than 73 percent of the world's economy. We use bilateral trade matrix to construct the spillover variables and estimate the indirect impact of oil price chocks. To control for institutional variations across the countries, we divide each group of the oil-exporting and oil-importing countries into two developed and developing groups. The estimation results for the period 1980-2015 show that all oil-importing countries are adversely affected by rising oil prices, but trade has mitigated the effect in developed countries. The impact of positive oil price shocks on developing oil-exporting countries is positive, but the trade has reduced the effect. However, the effect of the shocks on developed oil-exporting countries is not significant.

Revisiting the Impact of Oil Price Shocks on Macroeconomic Performance

Revisiting the Impact of Oil Price Shocks on Macroeconomic Performance PDF

Author: Yifan Shen

Publisher:

Published: 2019

Total Pages: 35

ISBN-13:

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Dramatic fluctuations in oil prices from time to time demand more research that can evaluate the impact of oil price shocks across the globe. Using a large-scale structural vector autoregression (SVAR) model that allows for an evolving parameter structure and that covers 60 oil-importing and -exporting economies, this paper disentangles the direct and indirect effects of oil price shocks on an economy. The results based on changes in oil prices and oil prices decomposed into aggregate demand, oil-specific demand and oil supply shocks show that in addition to the often measured direct impact, the indirect multiplier impact that works through the international transmission mechanism plays a crucial role in explaining the impact of oil price swings. The negative effects of a sharp rise in oil prices on oil importers are likely to be offset by the positive impact on oil exporters. Nevertheless, oil exporters may also suffer in the long run.

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