In this work, we provide an analysis over the period 1999–2015 of the effects of oil shocks on prices and GDP in a group of small Euro-area economies. The group includes Austria, Belgium, Finland, Greece, Ireland, Italy, Netherlands, Portugal and Spain. In order to characterise the macroeconomic outcomes of movements in oil prices, we adopt the structural vector autoregression (VAR) methodology. We find that under the European Monetary Union (EMU), oil price shocks have been important drivers of business cycle fluctuations in almost all these countries. Moreover, an increase in oil prices produces significant recessionary effects in all the countries included in the investigation. Thus, although there are different sizes in the responses of output in the investigated countries, our main conclusion is that despite the structural changes experienced by the European economies in the last decades, oil prices still matter for these countries. In the light of these results, we also stress some important challenges for the conduct of monetary policy in the Euro area.

The macroeconomics outcome of oil shocks in the small Eurozone economies / Raduzzi, R.; Ribba, A.. - In: WORLD ECONOMY. - ISSN 0378-5920. - 43:1(2020), pp. 191-211. [10.1111/twec.12862]

The macroeconomics outcome of oil shocks in the small Eurozone economies

Ribba A.
2020

Abstract

In this work, we provide an analysis over the period 1999–2015 of the effects of oil shocks on prices and GDP in a group of small Euro-area economies. The group includes Austria, Belgium, Finland, Greece, Ireland, Italy, Netherlands, Portugal and Spain. In order to characterise the macroeconomic outcomes of movements in oil prices, we adopt the structural vector autoregression (VAR) methodology. We find that under the European Monetary Union (EMU), oil price shocks have been important drivers of business cycle fluctuations in almost all these countries. Moreover, an increase in oil prices produces significant recessionary effects in all the countries included in the investigation. Thus, although there are different sizes in the responses of output in the investigated countries, our main conclusion is that despite the structural changes experienced by the European economies in the last decades, oil prices still matter for these countries. In the light of these results, we also stress some important challenges for the conduct of monetary policy in the Euro area.
2020
4-set-2019
43
1
191
211
The macroeconomics outcome of oil shocks in the small Eurozone economies / Raduzzi, R.; Ribba, A.. - In: WORLD ECONOMY. - ISSN 0378-5920. - 43:1(2020), pp. 191-211. [10.1111/twec.12862]
Raduzzi, R.; Ribba, A.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11380/1188552
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