A1 - Jean-Pierre Allegret
A1 - Valérie Mignon
A1 - Audrey Sallenave
TI - Oil Price Shocks and Global Imbalances: Lessons from a Model with Trade and Financial Interdependencies
IS - 2014-01
T3 - Working Papers
KW - oil prices
KW - global imbalances
KW - global VAR
N2 - 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.
ER -