Falling oil prices will offset rising US dollar

2015 ◽  
Keyword(s):  
Oil Prices ◽  
Sharp Drop ◽  
Content Type ◽  
Tax Amnesty ◽  
Us Economy ◽  
Large Expansion ◽  
Exploration And Production ◽  
Keystone Xl ◽  
Corporate Profits ◽  
The Impact

Significance Two shocks are hitting the US economy at the same time: a sharp drop in the price of oil and a rise in the value of the dollar. The impact of the drop in oil is different from previous cycles due to the large expansion in US oil production; there will be a benefit to consumers of oil but a drop in capital expenditures on oil exploration and production. The rise in the dollar has already begun to hurt corporate profits, as overseas earnings decline. Impacts Larger automobiles will be favoured by consumers as gasoline remains low, but will be a drag on finances if oil prices rise. Overseas earnings are less likely to be repatriated, leading to more calls for a tax 'amnesty' on such profits. The debate over Keystone XL may intensify, as Canadian producers become more invested in reducing transportation costs.

US midstream energy may see consolidation

2015 ◽  
Keyword(s):  
United States ◽  
Environmental Policy ◽  
Oil Prices ◽  
The United States ◽  
Content Type ◽  
White House ◽  
Oil Exports ◽  
Processing Plants ◽  
Exploration And Production ◽  
Keystone Xl

Significance The shale revolution in the United States created an explosion in upstream exploration and production (E&P) activity, as well as unprecedented demand for infrastructure to connect newfound resources with refineries and processing plants. Even a brief pause in shale revenue and drilling could imperil investment in this midstream sector. Impacts Keystone XL may be traded by the White House for environmental policy from Congress. The decline in oil prices will hit the Texan economy, as well as the presidential hopes of former Governor Rick Perry. Although oil exports may not be permitted, swaps with Mexico will ease oversupply of light crude.

Russia’s fiscal stimulus and fiscal sustainability

2013 ◽  
pp. 90-108 ◽  
Author(s):  
N. Akindinova ◽  
N. Kondrashov ◽  
A. Cherniavsky
Keyword(s):  
Government Spending ◽  
Public Expenditure ◽  
Oil Prices ◽  
Fiscal Sustainability ◽  
Macroeconomic Model ◽  
Sharp Drop ◽  
Fiscal Stimulus ◽  
Fiscal Multipliers ◽  
Russian Economy ◽  
The Impact

This study examines the impact of public expenditure on economic growth in Russia. Fiscal multipliers for various items of government spending are calculated by means of our macroeconomic model of the Russian economy. Resources for fiscal stimulus and optimization are analyzed. In this study we assess Russia’s fiscal sustainability in conditions of various levels of oil prices. We conclude that fiscal stimulus is ineffective in Russia, while fiscal sustainability in conditions of a sharp drop in oil prices is relatively low.

Modelling sectoral spillovers in the USA (1992–2015)

2020 ◽  
Vol 47 (3) ◽  
pp. 561-595
Author(s):  
Konstantinos N. Konstantakis ◽  
Panayotis G. Michaelides ◽  
Theofanis Papageorgiou ◽  
Theodoros Daglis
Keyword(s):  
Information Technology ◽  
General Equilibrium ◽  
Methodological Approach ◽  
Robustness Analysis ◽  
Autoregressive Process ◽  
Spillover Effects ◽  
Content Type ◽  
Us Economy ◽  
The Us ◽  
The Impact

PurposeThis research paper uses a novel methodological approach to investigate the spillover effects among the key sectors of the US economy.Design/methodology/approachThe paper links the US sectors via a node theoretic scheme based on a general equilibrium framework, whereas it estimates the general equilibrium equation as a Global Vector Autoregressive process, taking into consideration the potential existence of dominant units.FindingsBased on our findings, the dominant sector in the US economy, for the period 1992–2015, is the sector of information technology, finance and communications, a fact that gives credence to the view that the US economy is a service-driven economy. In addition, the US economy seems to benefit by the increased labour mobility across knowledge-intensive sectors, thus avoiding the ‘employment trap’ which in turn enabled the US economy to overcome the financial crisis of 2007.Originality/valueFirstly, the paper models by means of a network approach which is based on a general equilibrium framework, the linkages between the US sectors while treating the sector of information, technology, communications and finance as dominant, as dictated by its degree of centrality in the network structure. Secondly, the paper offers a robustness analysis regarding both the existence and the identification of dominant sectors (nodes) in the US economy. Thirdly, the paper studies a wide period, namely 1992–2015, fully capturing the recent global recession, while acknowledging the impact of the global crisis through the introduction of the relevant exogenous dummy variables; Lastly and most importantly, it is the first study to apply the GVAR approach in a network general equilibrium framework at the sectoral level.

Low oil prices will force policy choices on Azerbaijan

2015 ◽  
Keyword(s):  
Oil And Gas ◽  
Banking System ◽  
Oil Prices ◽  
Fiscal Consolidation ◽  
Content Type ◽  
Policy Choices ◽  
The Past ◽  
Fiscal Space ◽  
Will Force ◽  
The Impact

Subject The impact of prolonged low oil prices. Significance Hydrocarbons drove rapid economic expansion in the past. The associated increase in income fuelled the growth of domestically oriented sectors, such as trade and construction. Publicly financed infrastructure spending, using the fiscal space created by oil and gas revenues, also contributed. Impacts Sluggish oil production will compound the impact of persistent low oil prices. Fiscal consolidation will also require a stronger focus on the prioritisation of spending. Devaluation has not fully restored competitiveness but is a source of stress for the banking system.

Euro-area potential GDP will stay on low trajectory

2015 ◽  
Keyword(s):  
Euro Area ◽  
Productive Capacity ◽  
Potential Growth ◽  
Average Growth ◽  
Content Type ◽  
Us Economy ◽  
Long Run ◽  
Permanent Loss ◽  
Potential Gdp ◽  
The Impact

Subject Declining potential growth trends. Significance Although the euro-area is enjoying stronger growth this year, the rebound has been modest. Real GDP growth should average 1.5-1.7% in 2015, disappointing hopes for growth closer to 2.0%. This is adding to concern about the impact of persistent investment weakness, which curbs potential growth. Over 2010-14, the US economy grew by 2.2% on average, the same as during the five years preceding the financial crisis (2004-08), although both periods are mediocre compared to the long-run average of 3.0% for the 15 years prior to 2009. The euro-area's double-dip recession depressed its 2010-14 average growth to 0.7% compared with a rate of 2.2% for both 2004-08 and the 15 years prior to 2009. Impacts Chronic lack of job opportunities can lead to a permanent loss in productive capacity, damaging consumer confidence and spending. Policymakers will need to promote investment and job creation, lowering the cost of capital and reforming labour markets. These reforms could stir political instability by fuelling social resentment and political populism.

US consumption may start to pick up

2015 ◽  
Keyword(s):  
Trade Balance ◽  
Oil Prices ◽  
Energy Prices ◽  
Trust Fund ◽  
Content Type ◽  
Consumption Expenditures ◽  
Us Economy ◽  
West Texas ◽  
Personal Consumption ◽  
The Us

Significance One of the conundrums of the US economy that will influence the Federal Reserve's timing of an interest rate rise (currently projected for September) is where the savings from low energy prices have gone. Oil prices have dropped sharply since September 2014, from 97 dollars per barrel for West Texas Intermediate in June 2014 to 60 dollars per barrel today. Yet US personal consumption expenditures (PCE) only grew by 2.7%, well below the rate of growth of personal income, 4.1%. Impacts Greater spending on petrol will help the Highway Trust Fund slightly, but not before a new funding package is due by July 31. Low oil prices will outweigh consumer savings in such producing states as Texas and North Dakota. Greater consumer spending will adversely affect the US trade balance, as imports will rise due to the strong dollar.

Lower workforce will impair global GDP trend growth

2015 ◽  
Keyword(s):  
Labour Force ◽  
Labour Force Participation ◽  
The United States ◽  
Transport Systems ◽  
Hysteresis Phenomenon ◽  
Job Seekers ◽  
Content Type ◽  
Us Economy ◽  
Discouraged Workers ◽  
The Impact

Subject Changing demography and socio-economic trends in the labour force. Significance Changes in immigration and societal factors are causing labour supply shifts in the EU and the United States. Alongside the debate over the state of the US economy, there has been discussion over the persistent decline in US labour force participation and the impact on the economy of discouraged workers, who may never go back to the labour force. The United Kingdom has experienced population gains and an acceleration in the birth rate due to net immigration over the last decade. Impacts A rising UK population will pressure an already tight housing market and transport systems. High social benefits paid to younger people while actively job-seeking will encourage registration, boosting the UK labour force. Higher cyclical unemployment might become structural through the 'hysteresis' phenomenon, as job seekers get discouraged.

IMF agreement does not end Ecuador’s funding concerns

2020 ◽  
Keyword(s):  
Oil Prices ◽  
Environmental Activism ◽  
Economic Conditions ◽  
Sharp Drop ◽  
Content Type ◽  
Consumer Loans ◽  
Economic Shock ◽  
Small Banks ◽  
Oil Gas ◽  
The Way

Significance This Fund-supported programme will help Ecuador address the economic shock caused by the sharp drop in oil prices and the COVID-19 pandemic. It also paves the way for the settlement of a USD17.4bn debt exchange between Ecuador and its creditors. Impacts Strikes will increase as pandemic restrictions ease, with workers demanding protection from mass-firings and income losses. Environmental activism against extractive projects will continue to pose challenges for the oil, gas and mining sectors. Small banks will be highly vulnerable to worsening economic conditions given their exposure to consumer loans and microfinance. Inflows of Venezuelan refugees and migrants will exert renewed pressure on fiscal costs once the sanitary crisis subsides.

Epidemic may shake Chad's government

2020 ◽  
Keyword(s):  
Economic Impact ◽  
Death Rate ◽  
Oil Prices ◽  
New Wave ◽  
Short Term ◽  
Bottom Up ◽  
Content Type ◽  
The Government ◽  
The Impact ◽  
Mission Operation

Subject COVID-19 impact on Chad. Significance Chad has a relatively low number of confirmed COVID-19 cases but appears quite vulnerable to the impact of the pandemic, especially the economic impact. The country’s highly rural and youthful demography may help to slow the spread and keep the death rate low. Yet low oil prices, a return to recession and a new wave of sector-specific protests could pose major challenges for the government. Impacts Chad's epidemic appears unlikely to affect France’s Sahel counterterrorism mission Operation Barkhane, headquartered in Chad. A bottom-up revolution appears unlikely, and no major rebel challengers appear poised to take advantage of COVID-19 and associated crises. President Idriss Deby's government appears unlikely to fall in the short term -- French backing will continue to ensure his survival.

The impact of Iran Central Bank’s sanction on Tehran Stock Exchange

2017 ◽  
Vol 59 (3) ◽  
pp. 365-375 ◽  
Author(s):  
Mahdi Salehi ◽  
Mostafa Karimzadeh ◽  
Navid Paydarmanesh
Keyword(s):  
Central Bank ◽  
Stock Price ◽  
Negative Impact ◽  
Stock Exchange ◽  
Oil Prices ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
The Impact ◽  
Positive Effect

Purpose US sanctions have been a major feature of US Iran policy since Iran’s 1979 Islamic revolution, but the imposition of UN and worldwide bilateral sanctions on Iran that began in 2006 and increased dramatically as of 2010 is recent by comparison. The objectives of US sanctions have evolved over time. Broad international sanctions imposed on Iran harmed Iran’s economy and contributed to Iran’s acceptance of agreements that exchange constraints on its nuclear program for sanctions relief. The subject of this study is important because both Iran and the international communities are demanding for information about the effect of sanctions on Iran. In an international and regional perspective, it seems that sanctions have a negative impact on economic, social and even political status of Iran. Therefore, this paper aims to examine the impact of Iran Central Bank sanction on Tehran Stock Exchange as on December 31, 2011. Design/methodology/approach Variables of model are consisted by exchange rate, oil prices and Tehran Stock Exchange Price Index (TEPIX) from October 2, 2011 to March 29, 2012, which is offered daily. To analyze the model, the authors used Johansen–Juselius and Autoregressive Distributed Lag (ARDL) methods. Findings The results indicate that there is a long-run equilibrium relationship between selected variables as oil prices, and exchange rates have a positive effect on the TEPIX. In other words, the results of the econometric estimation show the positive effect of the Iran Central Bank sanction on the TEPIX. Thus, because of economic sanctions imposed by the Western countries, Tehran Stock Exchange has been growing. Originality/value No empirical research exists that examines the impact of sanctions on stock price in developing countries. This study fills this gap by examining the links between sanctions and stock price in Iran.

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