Where is an oil shock?
AbstractMuch of the literature examining the effects of oil shocks asks the question “What is an oil shock?” and has concluded that oil-price increases are asymmetric in their effects on the US economy. That is, sharp increases in oil prices affect economic activity adversely, but sharp decreases in oil prices have no effect. We reconsider the directional symmetry of oil-price shocks by addressing the question “Where is an oil shock?”, the answer to which reveals a great deal of spatial/directional asymmetry across states. Although most states have typical responses to oil-price shocks—they are affected by positive shocks only—the rest experience either negative shocks only (5 states), both positive and negative shocks (5 states), or neither shock (5 states).
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 31383.
Date of creation: 01 Jun 2011
Date of revision:
State-Level Oil Shocks;
Other versions of this item:
- C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Steven J. Davis & Prakash Lougani & Ramamohan Mahidhara, 1997.
"Regional Labor Fluctuations: Oil Shocks, Military Spending, and Other Driving Forces,"
JCPR Working Papers
4, Northwestern University/University of Chicago Joint Center for Poverty Research.
- Steven J. Davis & Prakash Loungani & Ramamohan Mahidhara, 1997. "Regional labor fluctuations: oil shocks, military spending, and other driving forces," International Finance Discussion Papers 578, Board of Governors of the Federal Reserve System (U.S.).
- Andrews, Donald W K, 1993.
"Tests for Parameter Instability and Structural Change with Unknown Change Point,"
Econometric Society, vol. 61(4), pages 821-56, July.
- Donald W.K. Andrews, 1990. "Tests for Parameter Instability and Structural Change with Unknown Change Point," Cowles Foundation Discussion Papers 943, Cowles Foundation for Research in Economics, Yale University.
- Barsky, Robert & Kilian, Lutz, 2004.
"Oil and the Macroeconomy Since the 1970s,"
CEPR Discussion Papers
4496, C.E.P.R. Discussion Papers.
- Lutz Kilian, 2008.
"Exogenous Oil Supply Shocks: How Big Are They and How Much Do They Matter for the U.S. Economy?,"
The Review of Economics and Statistics,
MIT Press, vol. 90(2), pages 216-240, May.
- Kilian, Lutz, 2005. "Exogenous Oil Supply Shocks: How Big Are They and How Much do they Matter for the US Economy?," CEPR Discussion Papers 5131, C.E.P.R. Discussion Papers.
- Stephen P.A. Brown & Mine K. Yücel, 1995. "Energy prices and state economic performance," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q II, pages 13-23.
- Engemann, Kristie M. & Kliesen, Kevin L. & Owyang, Michael T., 2011.
"Do Oil Shocks Drive Business Cycles? Some U.S. And International Evidence,"
Cambridge University Press, vol. 15(S3), pages 498-517, November.
- Kristie M. Engemann & Kevin L. Kliesen & Michael T. Owyang, 2010. "Do oil shocks drive business cycles? some U.S. and international evidence," Working Papers 2010-007, Federal Reserve Bank of St. Louis.
- Olivier J. Blanchard & Marianna Riggi, 2009.
"Why are the 2000s so different from the 1970s? A structural interpretation of changes in the macroeconomic effects of oil prices,"
NBER Working Papers
15467, National Bureau of Economic Research, Inc.
- Olivier J. Blanchard & Marianna Riggi, 2013. "WHY ARE THE 2000s SO DIFFERENT FROM THE 1970s? A STRUCTURAL INTERPRETATION OF CHANGES IN THE MACROECONOMIC EFFECTS OF OIL PRICES," Journal of the European Economic Association, European Economic Association, vol. 11(5), pages 1032-1052, October.
- Michael T. Owyang & Jeremy M. Piger & Howard J. Wall, 2004.
"Business cycle phases in U.S. states,"
2003-011, Federal Reserve Bank of St. Louis.
- Gerald Carlino & Robert DeFina, 1997. "The differential regional effects of monetary policy: evidence from the U.S. States," Working Papers 97-12, Federal Reserve Bank of Philadelphia.
- James D. Hamilton, 2000.
"What is an Oil Shock?,"
NBER Working Papers
7755, National Bureau of Economic Research, Inc.
- Kilian, Lutz, 2007.
"The Economic Effects of Energy Price Shocks,"
CEPR Discussion Papers
6559, C.E.P.R. Discussion Papers.
- John Elder & Apostolos Serletis, 2010.
"Oil Price Uncertainty,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 42(6), pages 1137-1159, 09.
- Tom Doan, . "RATS programs to estimate structural VAR-GARCH-M model," Statistical Software Components RTZ00052, Boston College Department of Economics.
- Mark C. Snead, 2009. "Are the energy states still energy states?," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 43-68.
- Gerald Carlino & Robert Defina, 1998. "The Differential Regional Effects Of Monetary Policy," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 572-587, November.
- David A. Penn, 2006. "What do we know about oil prices and state economic performance?," Regional Economic Development, Federal Reserve Bank of St. Louis, issue Oct, pages 131-139.
- James D. Hamilton & Michael T. Owyang, 2009.
"The propagation of regional recessions,"
2009-013, Federal Reserve Bank of St. Louis.
- Radha Bhattacharya, 2003. "Sources of variation in regional economies," The Annals of Regional Science, Springer, vol. 37(2), pages 291-302, 05.
- Hamilton, James D, 1983. "Oil and the Macroeconomy since World War II," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 228-48, April.
- Lutz Kilian & Robert J. Vigfusson, 2011. "Are the responses of the U.S. economy asymmetric in energy price increases and decreases?," Quantitative Economics, Econometric Society, vol. 2(3), pages 419-453, November.
- Lutz Kilian, 2009.
"Not All Oil Price Shocks Are Alike: Disentangling Demand and Supply Shocks in the Crude Oil Market,"
American Economic Review,
American Economic Association, vol. 99(3), pages 1053-69, June.
- Kilian, Lutz, 2006. "Not All Oil Price Shocks Are Alike: Disentangling Demand and Supply Shocks in the Crude Oil Market," CEPR Discussion Papers 5994, C.E.P.R. Discussion Papers.
- Davis, Steven J. & Haltiwanger, John, 2001.
"Sectoral job creation and destruction responses to oil price changes,"
Journal of Monetary Economics,
Elsevier, vol. 48(3), pages 465-512, December.
- Steven J. Davis & John Haltiwanger, 1999. "Sectoral Job Creation and Destruction Responses to Oil Price Changes," NBER Working Papers 7095, National Bureau of Economic Research, Inc.
- Omowumi Iledare and Williams O. Olatubi, 2004. "The Impact of Changes in Crude Oil Prices and Offshore Oil Production on the Economic Performance of U.S. Coastal Gulf States," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 97-114.
- Theodore M. Crone, 2005. "An Alternative Definition of Economic Regions in the United States Based on Similarities in State Business Cycles," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 617-626, November.
- Mork, Knut Anton, 1989. "Oil and Macroeconomy When Prices Go Up and Down: An Extension of Hamilton's Results," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 740-44, June.
- Claudio Morana, 2013.
"The oil price-macroeconomy relationship since the mid-1980s: A global perspective,"
223, University of Milano-Bicocca, Department of Economics, revised Feb 2013.
- Claudio Morana, 2012. "The Oil price-Macroeconomy Relationship since the Mid- 1980s: A global perspective," Working Papers 2012.28, Fondazione Eni Enrico Mattei.
- Vipin Arora & Pedro Gomis-Porqueras & Shuping Shi, 2011.
"Testing for Explosive Behaviour in Relative Inflation Measures: Implications for Monetary Policy,"
Monash Economics Working Papers
37-11, Monash University, Department of Economics.
- Arora, Vipin & Gomis-Porqueras, Pedro & Shi, Shuping, 2013. "The divergence between core and headline inflation: Implications for consumers’ inflation expectations," Journal of Macroeconomics, Elsevier, vol. 38(PB), pages 497-504.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.