Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192158 
Year of Publication: 
1996
Series/Report no.: 
Discussion Papers No. 174
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
This paper analyses the dynamic effects of aggregate demand, supply and real oil price shocks on real output and unemployment. Oil price shocks are included explicitly in the model, to investigate their role in explaining periods of global recessions. The different structural disturbances are identified by imposing long-run and short-run restrictions on a vector autoregressive model. The analysis is applied to Germany, Norway, United Kingdom and United States. For all countries except Norway, an adverse oil price shock has had a negative effect on output in the short run, and for US, the effect is negative also in the long run. However, whereas the first oil price shock was the most important factor behind the severity of the recession in the middle 1970s, adverse demand and supply shocks were more important than the second oil price shock in explaining the recession in the early 1980s. For Norway, a small oil exporting country, an adverse oil price shock stimulates the economy, although in the long run, the effect is most likely zero.
Subjects: 
Oil price shocks
permanent and trasitory components
structural change
unit root
vector autoregression.
JEL: 
C22
C32
E32
O57
Document Type: 
Working Paper
Document Version: 
Digitized Version

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