Abstract
This article discusses the effect of the oil shock on some OECD oil-importing countries such as Canada, France, Italy, China, and the United States and some OPEC oil-exporting countries such as Algeria, Iran, Kuwait, Saudi Arabia, and Venezuela. The model is estimated for the years 1976-2021. five annual variables are used for each country. The variables within the model include real oil prices, GDP growth, inflation, real wages, and real effective exchange rates. Real GDP is the main variable that shows the effects of oil prices on the economy, and the impact of oil prices on other model variables will indirectly affect economic activities. For this purpose, we estimate the vector autoregression model. Estimates obtained for different countries show that oil price shocks are one of the variables affecting economic growth. Also, in oil-exporting countries, oil shocks on economic growth are positive and negative in oil-importing countries. Also, Covid-19 is studied as an effective parameter in creating oil shocks.
Highlights
The dependence of technology on oil has made oil the main factor in the world economic cycle[1]
This study investigates the effect of oil shocks on the economic growth of some oilimporting and exporting countries
The real price of oil is obtained by dividing the nominal price of British oil by the producer price index [8] of the United States. dlgdp is the differential logarithm of GDP
Summary
The dependence of technology on oil has made oil the main factor in the world economic cycle[1]. OPEC is a major supplier, accounting for 40 percent of production and more than half of the world’s oil exports With this degree of importance, it is clear that any oil shock or disruption in the supply of this vital substance will cause a crisis in the global economic cycle[3]. This study focuses on the effect of oil shocks on the economic growth of exporting and importing countries. 3- In oil-importing countries, the effect of oil shocks on economic growth is negative. 2. Theoretical Framework we examine the factors affecting the market and global crude oil prices. Investigating the factors affecting the market and world prices of crude oil The significant increase in world crude oil prices in recent years and the intensification of price fluctuations in this strategic commodity have more than ever involved various minds in analyzing the reasons for these phenomena[6].
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