Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/179233 
Year of Publication: 
2017
Series/Report no.: 
ADBI Working Paper No. 777
Publisher: 
Asian Development Bank Institute (ADBI), Tokyo
Abstract: 
This study is an attempt to ascertain how sharp oil price changes can affect oil-exporting and oil-importing economies. To this end, a simultaneous equation model (SEM) was applied through a weighted two-stage least squares estimation method to different countries (21 cases) with business relations over the period from Q1 2000 to Q4 2015. In the case of oil-exporting countries - consisting of Iran, the Russian Federation, United Arab Emirates, Indonesia, and Kazakhstan - the findings revealed that they totally benefit from oil price increases. In the case of oil-importing countries, the effects are more diverse. To derive a better interpretation, we divided them into four groups: European Union (EU) members (Germany, Italy, the Netherlands, and Poland); East Asian nations (Japan; the People's Republic of China; the Republic of Korea; Viet Nam; Taipei,China; Singapore; and Hong Kong, China); Commonwealth of Independent States (Ukraine and Belarus); and others (the United States, India, and Turkey). The results showed that all these countries importing oil face a negative supply shock, except Turkey which benefits directly from an oil price shock. Furthermore, the indirect effect coefficient received through trade for all these countries was positive.
Subjects: 
crude oil price
trade linkage
direct and indirect effect of oil shocks
JEL: 
Q43
C30
E32
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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