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Do Oil Prices Matter? The Case of a Small Open Economy

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  • Joao Tovar Jalles

    (Faculty of Economics and Politics, University of Cambridge)

Abstract

This paper empirically evaluates the impact and effect of oil price fluctuations and shocks on French aggregate economic performance, industrial production index and inflation rate. Our methodology makes use of a multivariate VAR approach to analyse the stability and magnitude of this system by adopting different oil price specifications, together with a robustness check through the estimation of a St.Louis-type equation. We adopt several oil price specifications. Our results show that the main French macroeconomic aggregate variables have become progressively less reactive to oil price fluctuations and that the adjustment towards equilibrium levels have been done increasingly faster.

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Bibliographic Info

Article provided by Society for AEF in its journal Annals of Economics and Finance.

Volume (Year): 10 (2009)
Issue (Month): 1 (May)
Pages: 65-87

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Handle: RePEc:cuf:journl:y:2009:v:10:i:1:p:65-87

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Related research

Keywords: Oil price fluctuations; Multivariate VAR; Causality; Impulse Response; St.Louis Equation;

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References

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  1. Robalo, Pedro Brito & Salvado, João Cotter, 2008. "Oil price shocks and the Portuguese economy since the 1970s," FEUNL Working Paper Series wp529, Universidade Nova de Lisboa, Faculdade de Economia.
  2. Kilian, Lutz, 2005. "Exogenous Oil Supply Shocks: How Big Are They and How Much do they Matter for the US Economy?," CEPR Discussion Papers 5131, C.E.P.R. Discussion Papers.
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Cited by:
  1. Gaowang Wang & Heng-fu Zou, 2012. "Economic Globalization, Mercantilism and Economic Growth," CEMA Working Papers 548, China Economics and Management Academy, Central University of Finance and Economics.
  2. Liu, Luke, 2011. "Securitization and moral hazard: Does security price matter?," MPRA Paper 35004, University Library of Munich, Germany.
  3. Hasanat Shah, Syed & Li, Jun Jiang & Hasanat, Hafsa, 2013. "The impact of Oil Price and Oil Price Fluctuation on Growth Exports and Inflation in Pakistan," MPRA Paper 52560, University Library of Munich, Germany.

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