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Asymmetric effect of the oil price in the ecuadorian economy

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  • Bunce, Alan
  • Carrillo-Maldonado, Paul

Abstract

This paper aims to identify if there is an asymmetric response of the output to positive and negative changes in the price of oil. We take the case of Ecuador, an oil exporter but also an importer of derivates of the same commodity. We apply the local projections methodology to estimate this asymmetric response through state-dependence impulse response function. The results put in evidence that between the positive and negative variations of oil prices, those which affect the most to the Ecuadorian GDP are the negative ones. We also show that the persistence of the effect is higher when the oil price fall, rather than when there are positive variations.

Suggested Citation

  • Bunce, Alan & Carrillo-Maldonado, Paul, 2023. "Asymmetric effect of the oil price in the ecuadorian economy," Energy Economics, Elsevier, vol. 124(C).
    • Handle: RePEc:eee:eneeco:v:124:y:2023:i:c:s0140988323003742
    DOI: 10.1016/j.eneco.2023.106876
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    More about this item

    Keywords

    Asymmetry; Oil price; Local projections; Growth; Ecuador;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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