Where is an oil shock?

Engemann, Kristie and Owyang, Michael T. and Wall, Howard J. (2011): Where is an oil shock?

Abstract

Much of the literature examining the effects of oil shocks asks the question “What is an oil shock?” and has concluded that oil-price increases are asymmetric in their effects on the US economy. That is, sharp increases in oil prices affect economic activity adversely, but sharp decreases in oil prices have no effect. We reconsider the directional symmetry of oil-price shocks by addressing the question “Where is an oil shock?”, the answer to which reveals a great deal of spatial/directional asymmetry across states. Although most states have typical responses to oil-price shocks—they are affected by positive shocks only—the rest experience either negative shocks only (5 states), both positive and negative shocks (5 states), or neither shock (5 states).

• Item Type: MPRA Paper
• Language: English
• Keywords: State-Level Oil Shocks
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C31 - Cross-Sectional Models ; Spatial Models ; Treatment Effect Models ; Quantile Regressions ; Social Interaction Models; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E37 - Forecasting and Simulation: Models and Applications

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