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Oil price shocks and global imbalances: Lessons from a model with trade and financial interdependencies

Listed author(s):
  • Jean-Pierre Allegret

    ()

    (EconomiX - UPOND - Université Paris Ouest Nanterre La Défense - CNRS - Centre National de la Recherche Scientifique)

  • Valérie Mignon

    ()

    (EconomiX - UPOND - Université Paris Ouest Nanterre La Défense - CNRS - Centre National de la Recherche Scientifique)

  • Audrey Sallenave

    ()

The aim of this paper is to investigate oil price shocks’ effects and their associated transmission channels on global imbalances. To this end, we rely on a Global VAR approach that allows us to account for trade and financial interdependencies between countries. Considering a sample of 30 oil-exporting and importing economies over the 1980-2011 period, we show that the nature of the shock—demand-driven or supply-driven—matters in understanding the effects of oil price shocks on global imbalances. In addition, we evidence that the main adjustment mechanism to oil shocks is based on the trade channel, the valuation channel being at play only on the short run.

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Paper provided by HAL in its series Post-Print with number hal-01385980.

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Date of creation: 2015
Publication status: Published in Economic Modelling, Elsevier, 2015, 49, pp.232 - 247
Handle: RePEc:hal:journl:hal-01385980
Note: View the original document on HAL open archive server: https://hal-univ-paris10.archives-ouvertes.fr/hal-01385980
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