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Do U.S. Monetary Policy Shocks Raise Oil Prices and Excess Stock Premiums in Oil-Exporting Countries?

Author

Listed:
  • Benk, Szilárd
  • Gillman, Max

Abstract

This study examines how U.S. monetary policy shocks influence global asset prices by tracing their effects through real oil prices and the excess stock returns of oil-exporting nations. We show that expansionary U.S. monetary policy raises real oil prices, which in turn increase excess stock premiums in countries dependent on oil exports. These resource-driven wealth effects intensify geopolitical dynamics between the United States and major oil-exporting economies. Building on structural VAR frameworks that incorporate global oil market fundamentals, we augment the model with U.S. monetary variables, including money supply, inflation expectations, and measures of monetary policy uncertainty. Our results provide robust evidence that monetary-policy-induced oil price shocks elevate excess stock returns in oil-exporting nations, thereby identifying a new transmission channel through which U.S. policy actions shape international financial and strategic outcomes.

Suggested Citation

  • Benk, Szilárd & Gillman, Max, 2026. "Do U.S. Monetary Policy Shocks Raise Oil Prices and Excess Stock Premiums in Oil-Exporting Countries?," Corvinus Economics Working Papers (CEWP) 2026/01, Corvinus University of Budapest.
    • Handle: RePEc:cvh:coecwp:2026/01
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    Keywords

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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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