Oil Shocks and the Business Cycle in Europe
AbstractThis paper analyzes the effects of oil price shocks on the business cycle of the EU-15 countries using a standard dynamic general equilibrium model for a small open economy in which oil is included as an imported productive input. The results show that oil shocks can account for a significant percentage of GDP fluctuations in many of those countries. Furthermore, we show that the increases in the relative price of oil had a negative effect on welfare, particularly in southern European countries, which are historically associated with a lax monetary policy during oil crisis.
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Bibliographic InfoPaper provided by FEDEA in its series Studies on the Spanish Economy with number 215.
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-29 (All new papers)
- NEP-BEC-2006-01-29 (Business Economics)
- NEP-DGE-2006-01-29 (Dynamic General Equilibrium)
- NEP-EEC-2006-01-29 (European Economics)
- NEP-ENE-2006-01-29 (Energy Economics)
- NEP-MAC-2006-01-29 (Macroeconomics)
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