The U.S. Oil Supply Revolution and the Global Economy / Kamiar Mohaddes, Mehdi Raissi.

Format:

Book

Government document

Author/Creator:

Mohaddes, Kamiar.

Contributor:

Raissi, Mehdi.

Series:

IMF Working Papers; Working Paper ; No. 2015/259

IMF Working Papers

Language:

English

Subjects (All):

Petroleum reserves.

Petroleum mining.

Petroleum as fuel.

Physical Description:

1 online resource (36 pages)

Edition:

1st ed.

Place of Publication:

Washington, D.C. : International Monetary Fund, 2015.

Summary:

This paper investigates the global macroeconomic consequences of falling oil prices due to the oil revolution in the United States, using a Global VAR model estimated for 38 countries/regions over the period 1979Q2 to 2011Q2. Set-identification of the U.S. oil supply shock is achieved through imposing dynamic sign restrictions on the impulse responses of the model. The results show that there are considerable heterogeneities in the responses of different countries to a U.S. supply-driven oil price shock, with real GDP increasing in both advanced and emerging market oil-importing economies, output declining in commodity exporters, inflation falling in most countries, and equity prices rising worldwide. Overall, our results suggest that following the U.S. oil revolution, with oil prices falling by 51 percent in the first year, global growth increases by 0.16 to 0.37 percentage points. This is mainly due to an increase in spending by oil importing countries, which exceeds the decline in expenditure by oil exporters.

Contents:

Cover

Contents

I. Introduction

II. Modelling the Oil-Macroeconomy Relationship in a Global Context

A. The Global VAR (GVAR) Methodology

B. Country-Specific VARX* Models

C. The Global Oil Market

III. Empirical Results

A. Identification Strategy

B. The Macroeconomic Effects of the U.S. Oil Revolution

IV. Focusing on the MENA Region

A. A Long-Run Structural Model for Oil-Exporters

B. Spillovers to MENA Oil-Importers

V. Concluding Remarks

References

Figures

1. Oil Production in million barrels per day, 2005M1-2015M3

2. Impact of the U.S. Oil Supply Revolution on Real Output

3. Impact of the U.S. Oil Supply Revolution on Inflation

4. Impact of the U.S. Oil Supply Revolution on Equity Markets

5. Impact of the U.S. Oil Supply Revolution on Real Output in the MENA Region

6. Ratio of Oil Export Revenues to Real Output Across Oil Exporters, 1980-2010

7. Impact of a Negative Oil Revenue Shock for OPEC Countries

8. External Income and Price of Oil, in Log Level

9. Impact of a Negative Oil Price Shock

Tables

1. Countries and Regions in the GVAR Model

2. Lag Orders of the Country-Specific VARX*(p,q) Models Together with the Number of Cointegrating Relations (r)

3. Fiscal Break-Even Prices for Major Oil Exporters (U.S. dollars/barrel).

Notes:

Description based on publisher supplied metadata and other sources.

ISBN:

9781513548098

1513548093

9781513575100

1513575104

9781513513881

1513513885

OCLC:

933299305