EconStor >
ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/46457
  
Title:How strongly did the 2007/08 oil price hike contribute to the subsequent recession? PDF Logo
Authors:Carstensen, Kai
Elstner, Steffen
Paula, Georg
Issue Date:2011
Series/Report no.:CESifo working paper: Monetary Policy and International Finance 3357
Abstract:In this paper we challenge the view that the oil price has lost its influence on economic activity after the mid-1980s. While we concede that typical VAR models put forward in the literature fail to identify oil price shocks that significantly affect aggregate production, we obtain clearly negative output and positive producer price effects of oil price hikes in a firm level analysis for which we exploit a unique microeconomic data set for Germany. Inspired by this finding, we aggregate the firm level information into a single indicator that signals in which periods the German economy was in a supply regime, i.e., in a situation when prices and production moved into opposite directions. Concentrating an otherwise standard VAR based search on these periods, we are able to identify an oil price shock that affects the German production even on the aggregate level. In a counterfactual analysis we show that the 2007/08 oil price hike contributed notably to the subsequent recession in Germany even though it was by far not the main driver.
Subjects:oil price shock
VAR model
micro data
JEL:C30
E30
E32
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

Files in This Item:
File Description SizeFormat
659463776.pdf791.49 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/46457

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.