Macroeconomic performance of oil price shocks: Outlier evidence from nineteen major oil-related countries/regions

Abstract

As a special energy commodity, oil price shocks can affect not only the energy market but also the performance of the macroeconomy. This research provides complementary explanations for nineteen major oil-related countries/regions' macroeconomic effects caused by unexpected oil price changes. It focuses on the macroeconomic performance of oil price shocks from outlier perspective, investigating the inner hidden factors of co-movements between oil price shocks and macroeconomy. Three methods called Empirical Covariance (EC) method, Robust Covariance (RC) method and one-class Support Vector Machine (SVM) method are used in the outlier detection. Empirical results show that: (a) one-class SVM method has the best environmental adaptability for detecting the outlier performance of the co-movements between oil price shocks and macroeconomy, followed by EC and RC methods; (b) according to the time axis, the outlier performances of gross domestic production, consumer price index and unemployment rate are all concentrated in 2005-2014, which is highly consistent with the oil price shock process; (c) according to the spatial axis (countries), four categories with similar outlier performances are obtained. Outlier performance of macroeconomy of oil-related country/region in lower levels seems to be worse than that of the country/region in higher levels, which can be attributed to more attentions paid by higher-leveled oil-related countries on the oil price shock response system to relieve the severe macroeconomic impacts caused by oil price shocks.

Changes in Energy Consumption, Economic Growth and Aspirations for Energy Independence: Sectoral Analysis of Uses of Natural Gas in Ukrainian Economy

“…Among the factors that affect the implementation of energy-saving technologies and the overall dynamics of energy consumption, it is necessary to indicate a change in prices of energy carriers [47]. In general, changes in prices of energy resources can have a significant impact on various macroeconomic indicators, in particular on GDP dynamics [48], budget revenues [49], investment activity [50], etc. The results of assessing the impact of changes in prices of energy resources on the economy differ significantly in the various studies devoted to this issue.…”

Evaluation of the Adaptability of the Ukrainian Economy to Changes in Prices for Energy Carriers and to Energy Market Risks

“…At the same time, the value of the change in profit is determined by changes in other indicators. In order to evaluate the effect of these changes on the values of indicators (1) and 2, a method of decomposition of these indicators can be used. To do this, the values of the indicators (1) and (2) should be presented as the sum of several numbers, each of which corresponds to a certain factor, which affects the values of these indicators.…”

“…Table 6. The level of adaptability of sectors of the Ukrainian economy to the rise of prices for energy carriers (2011-2016) 1 .…”

“…This instability causes constant changes in the conditions of activity for enterprises and households. As a result, different changes are taking place in a variety of economic indicators, in particular, in gross domestic product (GDP) [1], in energy consumption [2], in investment [3], in volume of budget revenues [4], in unemployment rate [5], etc. [6,7].…”

Oil Price Reduction Impacts on the Iranian Economy

“…Finally, oil importing and consuming countries are more sensitive to oil price shocks than oil production. The Iran's macroeconomic variables (GDP, CPI, and unemployment) influenced by oil price shock and there is a co-movement between oil price and macro variables (Ju et al, 2016). …”