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Petrodollars and imports of oil exporting countries

Author

Listed:
  • Kamps, Annette
  • Beck, Roland

Abstract

This paper investigates the empirical determinants of import demand in oil exporting countries. Using a new dataset including a large cross section of oil exporting countries, we show with a panel cointegration analysis that import demand in these countries depends positively on domestic demand and exports, the real exchange rate and the price of oil. Fiscal surpluses, on the other hand, tend to reduce the demand for imports. More specifically, our import elasticities estimated for oil exporting countries are not far from estimates found in the literature on industrial countries. In particular, we conclude that the import elasticity with respect to domestic activity is larger than one - a finding which is in contrast to standard theoretical predictions but in line with most empirical findings for other countries. These results are robust over a wide set of alternative specifications. JEL Classification: F14, F01, Q43

Suggested Citation

  • Kamps, Annette & Beck, Roland, 2009. "Petrodollars and imports of oil exporting countries," Working Paper Series 1012, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20091012
    Note: 597822
    as

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    File URL: https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp1012.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Import Equation; oil exporting countries; panel cointegration;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F01 - International Economics - - General - - - Global Outlook
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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