Impact of higher oil prices on the Chinese economy

Zaouali, Sana

doi:10.1111/j.1468-0076.2007.00183.x

Cited by 38 publications

(21 citation statements)

References 2 publications

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“…There are several earlier studies on the impact of oil shocks on the PRC's economy that match our results (Zaouali 2007;Tang, Wu, and Zhang 2010;Du, Yanan, and Wei 2010). The PRC's oil consumption doubled over the past decade because of the country's high economic growth, which required large amounts of energy.…”

Section: Resultssupporting

confidence: 86%

Macroeconomic Effects of Oil Price Fluctuations on Emerging and Developed Economies in a Model Incorporating Monetary Variables

Hesary

Yoshino

2015

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of ADBI, ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Working papers are subject to formal revision and correction before they are finalized and considered published.Asian Development Bank Institute Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, JapanTel:+81-3-3593-5500 Fax:+81-3-3593-5571 URL:www.adbi.org E-mail: info@adbi.org AbstractThe goal of this paper is to examine the impact of crude oil price movements on two macro variables, the gross domestic product (GDP) growth rate and the consumer price index (CPI) inflation rate, in three countries, the People's Republic of China (an emerging economy), Japan, and the United States (developed economies), in a model incorporating monetary variables (money supply and exchange rate). The main objective of this research is to investigate whether these economies are still reactive to oil price movements and compare their reactions. Monetary variables are included in this survey because our earlier research showed that they have a significant role in oil price determination. To assess the relationship between crude oil prices and macro variables we adopt an N-variable structural vector autoregression (SVAR) model. The results suggest that the impact of oil price fluctuations on developed oil importers' GDP growth is much milder than on the GDP growth of an emerging economy. On the other hand, however, the impact of oil price fluctuations on the People's Republic of China's inflation rate was found to be milder than in the two developed countries that were examined.

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Section: Resultssupporting

confidence: 86%

Macroeconomic Effects of Oil Price Fluctuations on Emerging and Developed Economies in a Model Incorporating Monetary Variables

Hesary

Yoshino

2015

SSRN Journal

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“…A few other studies that try to consider developing countries (e.g. Zaouali, 2007 and Ozlale and Pekkurnaz, 2010) focus on oil‐importing developing economies. To the best of our knowledge, there is not a single literature that investigates the oil price–current account relation for an oil‐exporting developing economy like Nigeria.…”

Section: Introductionmentioning

confidence: 99%

Oil price shocks and the dynamics of current account balances in Nigeria

Chuku¹,

Akpan²,

Sam³

et al. 2011

OPEC Energy Review

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This paper pioneers research on the relationship between oil price shocks and current account dynamics in Nigeria, a country that doubles as an oil exporter and importer. Structural vector autoregression is applied to quarterly data from 1970Q1 to 2008Q4 to identify oil price shocks and to evaluate its net effect on Nigeria's current account balances. After introducing three control variables (output gap, real exchange rate misalignment and the lagged values of current account ratio), we impose six structural restrictions on the model to help track and identify the structural shocks of oil prices on current account balances. Overall, we find that oil price shocks have a significant short‐run effect on current account balances for Nigeria. Specifically, the impulse response of the current account ratio to oil price shocks increases speedily in the first six quarters, and then, it declines afterwards until the 30th quarter. The variance decomposition analysis shows that approximately 15.77 per cent of the variations in current account dynamics are caused by oil price shocks. The insight we draw from this finding is that there is no one‐for‐one relation between oil price shocks and current account dynamics. Exchange rate misalignment provides the offsetting effect as revealed from our results. The implication for policy is that reserve‐augmenting strategies, lax monetary policy and intensified international financial integration would need to be enhanced and sustained by policy‐makers to reinforce the positive effects of oil price shocks on the Nigerian economy.

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“…On the other hand, for an aggregate of major oil importers the corresponding shares are lower, but still large. One exceptional study that focuses on the emerging markets is Zaouali (2007), which focuses on the Chinese economy and conclude that increasing oil prices have modest effects on the current account since the economy could attract foreign capital and investment. However, as it is mentioned above, the literature is silent on studying small oil importing developing economies, for which high current account deficits remain as one of the major macroeconomic challenges.…”

Section: Introductionmentioning

confidence: 99%