Technology, Employment, and the Oil-Countries Business Cycle
AbstractOn the ground of the significance and potential dual-nature of oil price shocks- they may act simultaneously like pure technology and pure expenditure shocks- in the context of the oil-countries-net oil-exporters with a substantial share of oil-income on their total export an/or fiscal-income. The paper questions the validity in such context of Gal s (1999) influential methodology for evaluating- so far, negatively- the empirical merits of it aimed to restore such validity by disentangling oil-price shocks from the rest of shocks. The comparison of the results from the application of both methodologies to Norway, Mexico, Russia, Trinidad&Tobago and Venezuela, besides supporting the dual-nature hypothesis and the necessity of such disentangling, proves the latter to be instrumental to get results consistent with Gal s (1999). Additionally, the paper unveil some startling facts about the effects of oil price shocks in this context remarkably, the prevalence of their technological-nature when oil-income has a higher weight on export than on fiscal-income, and of their expenditure-nature otherwise and shed some light on the influence of institutional reform on such effects.
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Bibliographic InfoPaper provided by BBVA Bank, Economic Research Department in its series Working Papers with number 1405.
Length: 73 pages
Date of creation: Feb 2014
Date of revision:
SVAR; identifying restrictions; small open economies; oil economies; dutch disease; resource curse;
Find related papers by JEL classification:
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
- Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-02-15 (All new papers)
- NEP-CIS-2014-02-15 (Confederation of Independent States)
- NEP-ENE-2014-02-15 (Energy Economics)
- NEP-MAC-2014-02-15 (Macroeconomics)
- NEP-SOG-2014-02-15 (Sociology of Economics)
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