CEPII, Recherche et Expertise sur l'economie mondiale
Current Accounts and Oil Price Fluctuations in Oil-Exporting Countries: the Role of Financial Development

Jean-Pierre Allegret
Cécile Couharde
Dramane Coulibaly
Valérie Mignon

 Highlights :

 Abstract :
Oil-exporting countries usually experience large current account improvements following a sharp increase in oil prices. In this paper, we investigate this oil price-current account relationship on a sample of 27 oil-exporting economies. Relying upon the estimation of panel smooth transition regression models over the 1980-2010 period, we provide evidence that refines the traditional interpretation of oil price effects on current accounts. While current accounts are positively affected by oil price variations, this effect is nonlinear and depends critically on the degree of financial development of oil-exporting economies. More specifically, oil price variations exert a positive impact on the current account position for less financial developed countries, while this influence tends to diminish when the degree of financial deepness augments.

 Keywords : Current account | oil price | financial development | panel smooth transition | regression models

 JEL : F32, C33
CEPII Working Paper
N°2013-19, June 2013

Non Technical Summary

Full text

BibTeX (with abstract),
plain text (with abstract),
RIS (with abstract)