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

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

Abstract

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.

Suggested Citation

  • Ratti, Ronald A. & Vespignani, Joaquin L., 2013. "Why are crude oil prices high when global activity is weak?," Economics Letters, Elsevier, vol. 121(1), pages 133-136.
  • Handle: RePEc:eee:ecolet:v:121:y:2013:i:1:p:133-136
    DOI: 10.1016/j.econlet.2013.07.002
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    References listed on IDEAS

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    More about this item

    Keywords

    Oil prices; Global liquidity; Global real M2; Global financial crisis;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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