Credit and Oil Consumption

Arora, Vipin (2016): Credit and Oil Consumption.

Abstract

Credit greases the wheels of oil consumption—it is prevalent in purchases of cars, trucks, and even the construction of factories. But the traditional view is that it affects oil consumption only through economic activity and the price of oil. I argue that credit is important in its own right. To make my case, I first show that an association between credit and oil consumption growth exists across countries and time. I then give a nod to the traditional view, and conclude by showing that changes in credit alter oil consumption—even after accounting for economic activity and oil prices.

• Item Type: MPRA Paper
• Language: English
• Keywords: credit; oil consumption; economic activity; VAR
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E51 - Money Supply ; Credit ; Money Multipliers; F - International Economics > F3 - International Finance > F39 - Other; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q47 - Energy Forecasting

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