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Oil prices, unemployment and the financial crisis in oil-importing countries: The case of Spain

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  • Ordóñez, Javier
  • Monfort, Mercedes
  • Cuestas, Juan Carlos

Abstract

The aim of this paper is to analyse the effect of oil price shocks on unemployment in an oil-importing country such as Spain to determine whether they affect unemployment differently in times of financial distress. In order to do so, we use Bayesian methods to estimate a SVAR model with endogenous oil shocks. According to our results, the response of unemployment to oil shocks is clearly different in the pre-crisis compared to the crisis period. Asymmetries are also an important feature of the data: positive oil shocks contributed negatively to the evolution of employment in Spain after the outbreak of the crisis, while any decreases had less of an effect in terms of a recovery in the employment rate.

Suggested Citation

  • Ordóñez, Javier & Monfort, Mercedes & Cuestas, Juan Carlos, 2019. "Oil prices, unemployment and the financial crisis in oil-importing countries: The case of Spain," Energy, Elsevier, vol. 181(C), pages 625-634.
    • Handle: RePEc:eee:energy:v:181:y:2019:i:c:p:625-634
    DOI: 10.1016/j.energy.2019.05.209
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    More about this item

    Keywords

    Oil prices; Unemployment; Structural Bayesian VAR;
    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
    • F15 - International Economics - - Trade - - - Economic Integration

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