scholarly journals Oil price shocks and their short- and long-term effects on the Chinese economy

2010 ◽  
Vol 32 ◽  
pp. S3-S14 ◽  
Author(s):  
Weiqi Tang ◽  
Libo Wu ◽  
ZhongXiang Zhang
Keyword(s):  
Chinese Economy ◽  
Oil Price ◽  
Oil Price Shocks ◽  
Long Term Effects ◽  
Price Shocks ◽  
Short And Long Term

scholarly journals Globalization, Endogenous Oil Price Shocks and Chinese Economic Activity

2017 ◽  
Vol 22 (2) ◽  
pp. 39-64
Author(s):  
Gulzar Khan ◽  
Adiqa Kiani ◽  
Ather Maqsood Ahmed
Keyword(s):  
Open Economy ◽  
Aggregate Demand ◽  
Small Open Economy ◽  
Oil Prices ◽  
Chinese Economy ◽  
Oil Price ◽  
Economic Conditions ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Macroeconomic Activity

Using a structural vector autoregressive model, this study investigates the extent to which international oil price shocks have influenced the Chinese economy over the period 1991–2014. Given China’s intensified macroeconomic activity and its increasing demand for energy resources, we also examine the endogenous response of international oil prices to economic conditions in the country. To that end, we derive and empirically estimate a small open-economy New Keynesian model for China and the rest of the world. Our results show that the Chinese economy is relatively more sensitive to global economic conditions than to domestic policy actions. Global productivity shocks appear to be the most important variable causing Chinese macroeconomic activity through trade, where oil prices impact aggregate demand negatively.

scholarly journals OIL PRICE SHOCKS, FIRM UNCERTAINTY, AND INVESTMENT

2011 ◽  
Vol 15 (S3) ◽  
pp. 416-436 ◽  
Author(s):  
Kiseok Lee ◽  
Wensheng Kang ◽  
Ronald A. Ratti
Keyword(s):  
Investment Decisions ◽  
Oil Price ◽  
Oil Shocks ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Oil Shock ◽  
Mere Existence ◽  
Using Data ◽  
High Uncertainty

This paper seeks to answer the following questions: Do oil price shocks affect firms' investment decisions? Do oil price shocks affect investment decisions differentially depending on firm-specific uncertainty? Over what time horizon do oil price shocks affect high-uncertainty firms? Is the intensity of the oil price shock important, or just its existence? It is found that oil price shocks depress firms' investment decisions, and do so differentially by depressing investment more for more uncertain firms. Oil shocks affect investment for at least the first and second year after the shock. In the short term, the mere existence of a shock drives most of the effect. In the long term, the intensity of the oil shock is also important. Bloom, Bond, and Van Reenan's result [Review of Economic Studies 74, 391–415 (2007)] regarding responsiveness to demand shocks being eroded at more uncertain firms for data on U.K. firms is replicated using data on U.S. firms and persists after oil shocks are considered.

OIL PRICE SHOCKS, INFLATION, AND CHINESE MONETARY POLICY

2017 ◽  
Vol 23 (1) ◽  
pp. 1-28 ◽  
Author(s):  
Yunqing Wang ◽  
Qigui Zhu ◽  
Jun Wu
Keyword(s):  
Monetary Policy ◽  
Chinese Economy ◽  
Oil Price ◽  
New Keynesian ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Price Inflation ◽  
Core Inflation ◽  
Dynamic Stochastic ◽  
The Business Cycle

This paper proposes a New Keynesian dynamic stochastic general equilibrium model of the Chinese economy incorporating the demand of oil to study the effects of oil price shocks on the business cycle. The model answers several questions, including how monetary policy should respond to the disturbances from such shocks, and whether monetary authorities should use core inflation or headline inflation including oil price inflation as the monetary policy rule. The contributions could be summarized as follows: First, the model reveals that the oil transmission mechanism is determined by the nominal inertia, income effect, and the portfolio allocation effect. Second, both noncore inflation monetary policy and core inflation monetary policy that are simultaneously pegged to oil prices fluctuations are inferior to the monetary policy purely pegged to core inflation. Our findings suggest that the monetary policy should focus on core inflation instead of headline inflation.

Oil-food price dynamics in an oil-dependent emerging economy

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Opeoluwa Adeniyi Adeosun ◽  
Olaolu Richard Olayeni ◽  
Olumide Steven Ayodele
Keyword(s):  
Inflation Targeting ◽  
Food Prices ◽  
Food Price ◽  
Oil Price ◽  
Price Dynamics ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Content Type ◽  
Pass Through

Purpose This paper aims to examine the transmission from oil price to local food price returns in Nigeria from January 1995 to May 2019. Design/methodology/approach To circumvent erratic behaviours and account for possibilities of noises at the edge of the wavelet signals, the paper combines wavelet and Markov-switching techniques to determine the significance and magnitude of oil–food price dynamics across different time scales. Findings It is shown that oil to food price pass-through changed across frequencies. Notably, results reveal a swift pass-through which signals the dominance of the direct effect of oil price shocks on food prices with evidence of weak spillover in the short term. The medium- and long-term horizons witness the dominance of the indirect effect of oil price shocks with much sluggish transmission to food prices; the highest significant pass-through of about 4% are also observed when the oil price is denominated in the naira–USD exchange rate. Originality/value The study improves understanding of the relationship between oil price shocks and domestic food price returns. It shapes policy prescription on appropriate inflation targeting strategies of monetary authorities.

Asymmetric pass through of oil price to Chinese economic growth: new evidence from industrial sectors

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Donghui Liu ◽  
Lingjie Meng ◽  
Yudong Wang
Keyword(s):  
Oil Price ◽  
Partial Sums ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Short Term ◽  
Price Changes ◽  
Content Type ◽  
Industrial Sectors ◽  
Ferrous Metals

PurposeOil is crucial for industrial development. This paper investigates the impacts of oil price changes on China's industrial growth and examines whether the impacts are asymmetric. The estimations can help determine how oil price shocks are transmitted throughout the economy.Design/methodology/approachThis paper adopts West Texas Intermediate (WTI) crude oil price and industrial sector output and uses monthly data. The recently developed nonlinear autoregressive distributed lag (NARDL) model is employed to illustrate the effects in both the short term and long term. Importantly, under NARDL framework, this paper examines whether the impacts are asymmetric by decomposing oil price shocks into their positive and negative partial sums.FindingsThe empirical results prove clear evidence of asymmetries in the short term, long term or both terms. Specifically, some sectors benefit from, rather than suffer from higher oil prices, even some energy-intensive sectors, i.e. C31 (Smelting and Pressing of Ferrous Metals) and C32 (Smelting and Pressing of Non-ferrous Metals). However, the effects on some other energy-intensive sectors appear insignificant. Additionally, the results prove significantly negative responses in some sectors in the long term, and most of these sectors are in the top half of the ranking by energy consumptions.Originality/valueThis paper studies the economic responses at a disaggregated level by employing industry-level data. NARDL method is used to decompose oil price changes into their increases and decreases and investigate the asymmetries in the impacts of oil price changes.

Monetary policy and the effect of the transfer of oil prices to inflation

2020 ◽  
pp. 41-50
Author(s):  
Ph. S. Kartaev ◽  
I. D. Medvedev
Keyword(s):  
Monetary Policy ◽  
Inflation Targeting ◽  
Dynamic Models ◽  
Oil Prices ◽  
Oil Price ◽  
Oil Price Shocks ◽  
Negative Effects ◽  
Price Shocks ◽  
Policy Regime ◽  
The Impact

The paper examines the impact of oil price shocks on inflation, as well as the impact of the choice of the monetary policy regime on the strength of this influence. We used dynamic models on panel data for the countries of the world for the period from 2000 to 2017. It is shown that mainly the impact of changes in oil prices on inflation is carried out through the channel of exchange rate. The paper demonstrates the influence of the transition to inflation targeting on the nature of the relationship between oil price shocks and inflation. This effect is asymmetrical: during periods of rising oil prices, inflation targeting reduces the effect of the transfer of oil prices, limiting negative effects of shock. During periods of decline in oil prices, this monetary policy regime, in contrast, contributes to a stronger transfer, helping to reduce inflation.

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