Investigating the Economic effects of Oil Price Shocks on Oil Exporting Countries

Tariverdi, Amir; Nikooghadam, Masoud; Elyaspour, Behnam

Investigating the Economic effects of Oil Price Shocks on Oil Exporting Countries

Document Type : Original Article

Authors

¹ M.A., Department of Economics, Faculty of Human sciences, University of Bojnord, North Khorasan, Iran.

² Assistant professor, Department of Economics, Faculty of Human sciences, University of Bojnord, North Khorasan, Iran.

Abstract

Changes in global oil prices usually inhere significant consequences for the economic growth of oil exporting countries. For this reason, oil exporting countries are constantly paying close attention to movements in the price oil. The main goal of the current research is to investigate the economic effects emanating from oil price uncertainty shocks, during the 1990 to 2020 period, on oil exporting countries (defined here as those with a significant export share, including Iran, Russia, the United States of America and Canada). For this purpose, the methodology of this study utilized structural vector auto regression (SVAR) model for data analysis.
The results obtained show that oil price uncertainty shocks constitute an important driver of fluctuations in the industrial production of the countries understudy. However, the response of exchange rates to the oil price uncertainty shocks have been different among the countries understudy. Herewith, this response was observed to be shorter in America and Canada, yet, in contrast, this response was found to be longer in countries such as Iran and Russia. Furthermore, the study finds that the role of oil price uncertainty shocks on exchange rate fluctuations in Iran to have been more pronounced.

Keywords