Understanding the impact of oil shocks
Autor(a) principal: | |
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Data de Publicação: | 2005 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/1822/1625 |
Resumo: | This paper provides new empirical evidence on and theoretical support for the close link between oil prices and aggregate macroeconomic performence in the 1970s. Although this link has been well documented in the empirical literature and is further confirmed in this paper, standard economic models are not able to replicate this link when actual oil prices are used to stimulate the models. In particular, standard models cannot explain the depht of the recession in 1974-75 and the strong revival in 1976-78 based on the oil price movements in that period. This paper argues that a missing multiplier-accelerator mechanism from standard models may hold the key. This multipliplier-accelerator mechanism not only exacerbated the impact of the oil schocks in 1973-74 but also helped create the temporary recovery in 1976-1978. This paper derives the missing multiplier-accelarator mechanism from externalities in general equilibrium. Our calibrated model can explain both the recession in 1974-75 and revival in 1976-78. |
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Understanding the impact of oil shocksOil price shocksReal business cycleIndeterminacyCapacity utilizationExternalitiesMonopolistic competitionThis paper provides new empirical evidence on and theoretical support for the close link between oil prices and aggregate macroeconomic performence in the 1970s. Although this link has been well documented in the empirical literature and is further confirmed in this paper, standard economic models are not able to replicate this link when actual oil prices are used to stimulate the models. In particular, standard models cannot explain the depht of the recession in 1974-75 and the strong revival in 1976-78 based on the oil price movements in that period. This paper argues that a missing multiplier-accelerator mechanism from standard models may hold the key. This multipliplier-accelerator mechanism not only exacerbated the impact of the oil schocks in 1973-74 but also helped create the temporary recovery in 1976-1978. This paper derives the missing multiplier-accelarator mechanism from externalities in general equilibrium. Our calibrated model can explain both the recession in 1974-75 and revival in 1976-78.Fundação para a Ciência e a Tecnologia (FCT) – Programa Operacional “Ciência, Tecnologia, Inovação” (POCTI).União Europeia (UE). Fundo Europeu de Desenvolvimento Regional (FEDER) – III Quadro Comunitário de Apoio (QCA III).Universidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE)Universidade do MinhoConraria, Luís AguiarWen, Yi2005-01-302005-01-30T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/1822/1625engCONRARIA, Luís Aguiar ; YI WEN - “Understanding the impact of oil shocks” [Em linha]. Braga : Núcleo de Investigação em Políticas Económicas, 2005. [Consult. 18 Maio 2005]. Disponível em: http://www2.eeg.uminho.pt/economia/nipe/WP/WP_NIPE_2_05.pdfinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-07-21T12:01:06Zoai:repositorium.sdum.uminho.pt:1822/1625Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T18:51:01.725094Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Understanding the impact of oil shocks |
title |
Understanding the impact of oil shocks |
spellingShingle |
Understanding the impact of oil shocks Conraria, Luís Aguiar Oil price shocks Real business cycle Indeterminacy Capacity utilization Externalities Monopolistic competition |
title_short |
Understanding the impact of oil shocks |
title_full |
Understanding the impact of oil shocks |
title_fullStr |
Understanding the impact of oil shocks |
title_full_unstemmed |
Understanding the impact of oil shocks |
title_sort |
Understanding the impact of oil shocks |
author |
Conraria, Luís Aguiar |
author_facet |
Conraria, Luís Aguiar Wen, Yi |
author_role |
author |
author2 |
Wen, Yi |
author2_role |
author |
dc.contributor.none.fl_str_mv |
Universidade do Minho |
dc.contributor.author.fl_str_mv |
Conraria, Luís Aguiar Wen, Yi |
dc.subject.por.fl_str_mv |
Oil price shocks Real business cycle Indeterminacy Capacity utilization Externalities Monopolistic competition |
topic |
Oil price shocks Real business cycle Indeterminacy Capacity utilization Externalities Monopolistic competition |
description |
This paper provides new empirical evidence on and theoretical support for the close link between oil prices and aggregate macroeconomic performence in the 1970s. Although this link has been well documented in the empirical literature and is further confirmed in this paper, standard economic models are not able to replicate this link when actual oil prices are used to stimulate the models. In particular, standard models cannot explain the depht of the recession in 1974-75 and the strong revival in 1976-78 based on the oil price movements in that period. This paper argues that a missing multiplier-accelerator mechanism from standard models may hold the key. This multipliplier-accelerator mechanism not only exacerbated the impact of the oil schocks in 1973-74 but also helped create the temporary recovery in 1976-1978. This paper derives the missing multiplier-accelarator mechanism from externalities in general equilibrium. Our calibrated model can explain both the recession in 1974-75 and revival in 1976-78. |
publishDate |
2005 |
dc.date.none.fl_str_mv |
2005-01-30 2005-01-30T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/1822/1625 |
url |
http://hdl.handle.net/1822/1625 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
CONRARIA, Luís Aguiar ; YI WEN - “Understanding the impact of oil shocks” [Em linha]. Braga : Núcleo de Investigação em Políticas Económicas, 2005. [Consult. 18 Maio 2005]. Disponível em: http://www2.eeg.uminho.pt/economia/nipe/WP/WP_NIPE_2_05.pdf |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
Universidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE) |
publisher.none.fl_str_mv |
Universidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE) |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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RCAAP |
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RCAAP |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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1799132281306087424 |