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Do Global Crude Oil Markets Behave as One Great Pool? A Cyclical Analysis

Author

Listed:
  • Niyati Bhanja

    (MICA - The School of Ideas)

  • Arif Billah Dar

    (Shri Mata Vaishno Devi University (SMVDU))

  • Aviral Kumar Tiwari

    (Rajagiri Centre for Business Studies
    Montpellier Business School)

Abstract

In energy economics literature, the controversial assertion of whether crude oil markets are regionalized (Weiner in Energy J 12:95–107, 1991) or behave as one unified entity (Adelman in Energy J 5(3):1–9, 1984) is still an unsettled debate. While the proponents of globalization hypothesis trust that the crude oil markets behave as one big pool, the advocates of regionalization believe that they are segmented. To settle this debate, we tested the globalization–regionalization hypothesis by estimating the wavelet coherence, multiple correlation, cross-correlation, and club convergence at different time horizons. The results suggest that the crude oil markets remain synced over longer time horizons, thereby reaffirming the globalization argument. However, at shorter time horizons, they behave rather independently and are hence mostly regionalized.

Suggested Citation

  • Niyati Bhanja & Arif Billah Dar & Aviral Kumar Tiwari, 2018. "Do Global Crude Oil Markets Behave as One Great Pool? A Cyclical Analysis," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 14(2), pages 219-241, November.
    • Handle: RePEc:spr:jbuscr:v:14:y:2018:i:2:d:10.1007_s41549-018-0028-y
    DOI: 10.1007/s41549-018-0028-y
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Crude oil; Globalization; Regionalization;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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