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ID: 110757

Effects of oil price on regional economies with different produ: a case study from Korea using a structural VAR model / Park, Chuhwan; Chung, Mo; Lee, Sukgyu

Park, Chuhwan	Journal Article
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Publication

2011.

Summary/Abstract

This study analyzes the effects of oil price fluctuations on regional macroeconomic variables with a structural VAR model. We classified fifteen metropolitan cities and provinces of Korea into four major regions (Capital, Central, Honam, and Gyeongsang) and examined the effects of oil price fluctuations on the economy of these regions. The results in the short- and long-term lag structures show a negative response to industrial production and price. The Capital region is less affected by oil price fluctuations than the other three provincial regions. We concluded that the government should focus on creating an industrial environment to accumulate production factors and technologies in oil price-sensitive regions.

Key Words

Oil Price Fluctuations ; Structural VAR Model ; Impulse Response Function

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ID: 088270

Macroeconomic effects of oil price fluctuations on a small open: the case of Trinidad and Tobago / Lorde, Troy; Jackman, Mahalia; Thomas, Chrystol

Lorde, Troy	Journal Article
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Publication

2009.

Summary/Abstract

Using vector autoregressive (VAR) methodology, this paper empirically investigates the macroeconomic effects of oil price fluctuations on Trinidad and Tobago. Overall, we find that the price of oil is a major determinant of economic activity of the country. Our impulse response functions suggest that following a positive oil price shock, output falls within the first two years followed by positive and growing response. We also investigate the macroeconomic impact of oil price volatility. Results suggest that an unanticipated shock to oil price volatility brings about random swings in the macroeconomy; however, only government revenue and the price level exhibit significant responses. With regard to the magnitude of the responses, shocks to oil price volatility tend to yield smaller macroeconomic impacts in comparison to shocks to oil prices. Variance decompositions suggest that the price of oil is a major component of forecast variation for most macroeconomic variables. Finally, Granger-causality tests indicate causality from oil prices to output and oil prices to government revenue.

Key Words

Oil Price Fluctuations ; Innovation Accounting ; Trinidad and Tobago

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