scholarly journals Oil Price Shocks and Exchange Rate Management: The Implications of Consumer Durables for the Small Open Economy

2008 ◽  
Author(s):  
Michael Plante
Keyword(s):  
Exchange Rate ◽  
Open Economy ◽  
Small Open Economy ◽  
Oil Price ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Consumer Durables ◽  
Exchange Rate Management

scholarly journals Globalization, Endogenous Oil Price Shocks and Chinese Economic Activity

2017 ◽  
Vol 22 (2) ◽  
pp. 39-64
Author(s):  
Gulzar Khan ◽  
Adiqa Kiani ◽  
Ather Maqsood Ahmed
Keyword(s):  
Open Economy ◽  
Aggregate Demand ◽  
Small Open Economy ◽  
Oil Prices ◽  
Chinese Economy ◽  
Oil Price ◽  
Economic Conditions ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Macroeconomic Activity

Using a structural vector autoregressive model, this study investigates the extent to which international oil price shocks have influenced the Chinese economy over the period 1991–2014. Given China’s intensified macroeconomic activity and its increasing demand for energy resources, we also examine the endogenous response of international oil prices to economic conditions in the country. To that end, we derive and empirically estimate a small open-economy New Keynesian model for China and the rest of the world. Our results show that the Chinese economy is relatively more sensitive to global economic conditions than to domestic policy actions. Global productivity shocks appear to be the most important variable causing Chinese macroeconomic activity through trade, where oil prices impact aggregate demand negatively.

scholarly journals The Impact of Oil Price Shocks on National Income: Evidence from Azerbaijan

Energies ◽  
2021 ◽  
Vol 14 (6) ◽  
pp. 1695
Author(s):  
Shahriyar Mukhtarov ◽  
Sugra Humbatova ◽  
Mubariz Mammadli ◽  
Natig Gadim‒Oglu Hajiyev
Keyword(s):  
Exchange Rate ◽  
Oil Price ◽  
Gdp Per Capita ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Total Trade ◽  
Trade Turnover ◽  
Per Capita ◽  
The Exchange Rate ◽  
The Impact

This study investigates the influence of oil price shocks on GDP per capita, exchange rate, and total trade turnover in Azerbaijan using the Structural Vector Autoregressive (SVAR) method to data collected from 1992 to 2019. The estimation results of the SVAR method conclude that oil price shocks (rise in oil prices) affect GDP per capita and total trade turnover positively, whereas its influence on the exchange rate is negative in the case of Azerbaijan. According to results of this study, Azerbaijan and similar oil-exporting countries should reduce the dependence of GDP per capita, the exchange rate, and total trade turnover from oil resources and its prices in the global market. Therefore, these countries should attempt to the diversification of GDP per capita, the exchange rate, and other sources of total trade turnover.

On the asymmetric response of the exchange rate to shocks in the crude oil market

2020 ◽  
Vol 14 (4) ◽  
pp. 839-852 ◽  
Author(s):  
Huthaifa Alqaralleh
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Financial Crises ◽  
Oil Price ◽  
Series Data ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Content Type ◽  
The Exchange Rate ◽  
Asymmetric Cointegration

Purpose This paper aims to investigate the nonlinear dynamics in the effects of oil price shocks on the exchange rate for a sample from the Group of Twenty (G20) over the period 1994:1-2019:1. Design/methodology/approach Using monthly time series data covering the period1994:1-2019:1, the author first use the non-parametric triples test of Randles et al. (1980) to ascertain the existence of asymmetric properties in the sample of exchange rates. Then the author used the nonlinear ARDL cointegration approach developed by Shin et al. (2014) to examine the reaction of these exchange rates to the oil price shocks. Findings This study has identified significant evidence that the exchange rate is asymmetrically distributed, with the effect that high appreciation of the exchange rate is followed by slower depreciation. The NARDL results support such asymmetry even more strongly because in the test the exchange rate is shown to react differently in the long term to positive and negative shocks in oil prices. Another major finding was that the speed of adjustment differed over the sample, as the cumulative dynamic multipliers effect highlighted. Research limitations/implications This change in direction and the employment of non-linear technique can be to obtain better insight into the model specification, which the author believes, will not only enhance the findings in the literature but also enhance forecasting and decision-making. Practical implications A practical implication of this change is the possibility that policymakers and participants concerned with exchange rate stability should intervene in the market to alleviate the unfavourable impact of oil price shocks on the exchange rate. Originality/value Addressing this nonlinear dynamic in the effects of oil price shocks on the exchange rate have at least the following two important reasons: asymmetry and regime change are types of nonlinearities that affect the market dynamics, especially, over marked sample period with such financial crises as the global financial crises of 2007, thereby violating the linear models. Adopting an asymmetric cointegration technique permits to incorporate cointegrated positive and negative components of the considered series.

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