Abstract
The objective of this research is to analyze the asymmetric impact of crude oil prices on the real per capita gross domestic product (GDP) between 1945 and 2018 in Spain. The decomposition of oil prices into positive and negative partial sums in a nonlinear autoregressive distributed lag (NARDL) model allows examine the results derived from the fluctuations of oil prices in the international markets. The effects of those movements on per capita GDP are primarily long range, having the long-run oil price decreases a larger impact on the per capita GDP than the oil price increases. In spite of these asymmetric effects, the energy policy agenda should address some issues related to not only tax handling but to market competition and efficient wages mechanisms as well. Keywords: per capita GDP, asymmetric oil prices, NARDL, Spain JEL Classifications: C22, O40, Q41 DOI: https://doi.org/10.32479/ijeep.8806
Highlights
Petroleum remains the main source of energy at world level in spite that different international agreements bet on actions for cleaner energies and a sustainable low carbon future
The current dependency for most countries is so large that all goods and services of an economy in one way or another are affected by the fluctuations of crude oil prices
The present paper aims at contributing to the vast body of literature with a different approach and different results for the Spanish case
Summary
Petroleum remains the main source of energy at world level in spite that different international agreements bet on actions for cleaner energies and a sustainable low carbon future. The International Energy Agency (ww.iea.org) predicts a growing world demand for crude oil until 2040. The current dependency for most countries is so large that all goods and services of an economy in one way or another are affected by the fluctuations of crude oil prices. These influence a household economy because one needs to fill the car with gasoline or diesel, go on public or private transportation, buy oil derivative products or buy food, clothes, and other goods which in their turn need oil energy to be transported and be sold in stores. Higher oil prices as Lardic and Mignon (2008) indicate, aside from causing inflation and reduction on consumption, slow down output through the cost increases, deteriorate the terms of trade of importing-oil countries, they may cause a change of productive structure generating unemployment and impact a country’s monetary policy because there is more money demand, the interest rates augment and investments are forced to cut back.
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