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Why are crude oil prices high when global activity is weak?

  • Ratti, Ronald A.
  • Vespignani, Joaquin L.

There have been substantial increases in liquidity in recent years and real oil prices have almost returned to the high levels achieved before the global financial crisis. Unanticipated increases in global real M2 led to statistically significant increases in real oil prices. The historical impact of global real M2 on the real price of crude oil is important in the recovery of oil prices over 2009 to 2011.

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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 121 (2013)
Issue (Month): 1 ()
Pages: 133-136

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Handle: RePEc:eee:ecolet:v:121:y:2013:i:1:p:133-136
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  1. James D. Hamilton, 2011. "Historical Oil Shocks," NBER Working Papers 16790, National Bureau of Economic Research, Inc.
  2. 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.
  3. Ron Alquist & Lutz Kilian & Robert J. Vigfusson, 2011. "Forecasting the Price of Oil," Working Papers 11-15, Bank of Canada.
  4. Ansgar Belke & Walter Orth & Ralph Setzer, 2009. "Liquidity and the Dynamic Pattern of Asset Price Adjustment: A Global View," Discussion Papers of DIW Berlin 933, DIW Berlin, German Institute for Economic Research.
  5. Max Gillman & Anton Nakov, 2009. "Monetary effects on nominal oil prices," Banco de Espa�a Working Papers 0928, Banco de Espa�a.
  6. Reuven Glick & Sylvain Leduc, 2011. "Central bank announcements of asset purchases and the impact on global financial and commodity markets," Working Paper Series 2011-30, Federal Reserve Bank of San Francisco.
  7. Alessio Anzuini & Marco J. Lombardi & Patrizio Pagano, 2012. "The impact of monetary policy shocks on commodity prices," Temi di discussione (Economic working papers) 851, Bank of Italy, Economic Research and International Relations Area.
  8. Robert B. Barsky & Lutz Kilian, 2001. "Do We Really Know that Oil Caused the Great Stagflation? A Monetary Alternative," NBER Working Papers 8389, National Bureau of Economic Research, Inc.
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