Crude Oil and the Macroeconomy: Tests of Some Popular Notions: Note

Gisser, Micha; Goodwin, Thomas

doi:10.2307/1992323

Cited by 474 publications

(251 citation statements)

References 3 publications

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“…After the 1973 oil crisis, several studies (Timilsina 2015, Kilian and Vigfusson 2011, Kilian 2008, Hamilton 1983, 1985, Gisser and Goodwin 1986, Mork 1989) affirmed an inverse relationship between oil prices and economic growth. Economists and researchers have reached a consensus that oil price volatility simultaneously reduces economic growth.…”

Section: Introductionmentioning

confidence: 99%

Dynamics of electricity consumption, oil price and economic growth: Global perspective

et al. 2017

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Abstract:This study uses the data from 157 countries from 1960 to 2014 to analyze the relationship between economic growth, electricity consumption, oil prices, capital, and labor. The economic growth of developing countries with industrial infrastructure has a more significant association with electricity consumption than oil prices. We use oil prices and electricity consumption jointly to study highly predictive observations for economic growth. The data are categorized by income, OECD and regional levels. The panel cointegration, long-run parameter estimation, and Pool Mean Group testsare used to analyze the cointegration and short-run and long-run relationships between the variables. The empirical results indicate the presence of cointegration between the variables. The presence of feedback effects between electricity consumption and economic growth, oil prices and economic growth is valid. These findings confirm that inspite of the oil prices, developing countries rely heavily on electricity consumption for economic growth. In the short run, growth and feedback effects suggest that more vigorous electricity policies should be implemented to attain sustainable economic growth for the long-term.

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Section: Introductionmentioning

confidence: 99%

Dynamics of electricity consumption, oil price and economic growth: Global perspective

et al. 2017

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“…Many authors (such as Rasche and Tatom (1981); Darby (1982); Hamilton (1983); Gisser and Goodwin (1986); Mork (1989)) argued that changes in the price of energy (particularly oil) has a significant effect on economic activity. Energy shocks could affect economic growth through both supply and demand.…”

Section: Conclusion and Policy Implicationsmentioning

confidence: 99%

The economic growth enigma revisited: The EU-15 since the 1970s

et al. 2015

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Current macro-econometric models mostly incorporate just two factors of production, labor and capital (with a time-dependent multiplier representing technological change or total factor productivity). These models assume that energy is an intermediate product of some combination of human labor and capital. These models also assume that the supply of energy is driven by economic demand. We assume the contrary, i.e. that useful energy is a primary input, derived (mostly) from natural capital. This failure to capture the impact of primary resources (as useful energy) on economic growth leads to inappropriate formulation of economic growth theories. To understand that impact better we need explicit evidence of marginal products of capital, labor and useful energy or useful work. As applied to the explanation of the past half century of economic growth of the EU-15 countries, the new results demonstrate the use of non-parametric relationships between capital, labor and useful energy to explain economic growth. They also indicate that marginal products of capital, labor and useful energy are variablethe marginal product depends on the levels of capital stock, labor input and useful energy flows. The proposed semi-parametric production function suggests country-specific policy implications for the EU (and other countries).

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“…The stipulated explanations for the relationship between oil price movements and macroeconomic performance has emerged from the observed linkage between oil price realizations and economic recession. (Rasche & Tatom, 1977;Dagut, 1978;Darby, 1982;Lilien, 1982;Hamilton, 1983Hamilton, , 2009Burbidge & Harrison, 1984;Nasseh & Elyasiani, 1984;Gisser & Goodwin, 1986;Loungani, 1986). The literature, however, lacks studies that show the link between oil price change over a long period of time felt by net oil-exporting developing countries and their economic development.…”

Section: Savings Tend To Sustained Economic Growthmentioning

confidence: 99%

The Role of Savings in Reducing the Effect of Oil Price Volatility for Sustainable Economic Growth in Oil Based Economies: The Case of GCC Countries

Al‐Khouri¹,

Dhade²

2014

IJEF

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We investigate the simultaneous links between oil price changes, national savings, legal and institutional development, and economic growth in the Gulf Cooperation Council (GCC) countries. Our study includes six GCC countries namely, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. We base our analysis on annual data that covers the period from 1980 to 2011. We implement different methodologies on time series cross sectional data: First, we test our model using fixed effect and random effect model techniques; Second, we employ Arellano-Bond/Blundell-Bond estimator to reduce the endogeneity problem that is common in this kind of studies. Results reveal a nonlinear and concave relationship between saving rates and economic growth. This result suggests that, at low level of economic growth, the increase in savings leads to high economic growth. However, as the countries' revenues and surpluses increase significantly (at higher levels in revenues and savings), high level of savings lead to lower growth in the economy. This might due to the lack of absorption capacity of the GCC markets. In addition, controlling for different factors, oil price changes explain the variability in the economic growth of the GCC countries. Economic globalization affects growth negatively, while institutional quality plays no role in economic growth of the GCC markets.

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Crude Oil and the Macroeconomy: Tests of Some Popular Notions: Note

Cited by 474 publications

References 3 publications

Dynamics of electricity consumption, oil price and economic growth: Global perspective

Dynamics of electricity consumption, oil price and economic growth: Global perspective

The economic growth enigma revisited: The EU-15 since the 1970s

The Role of Savings in Reducing the Effect of Oil Price Volatility for Sustainable Economic Growth in Oil Based Economies: The Case of GCC Countries

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