US-China Tensions, US Partisan Conflict and Global Oil Prices: Scapegoating or Following the Flag or both?

Saadaoui, Jamel (2025): US-China Tensions, US Partisan Conflict and Global Oil Prices: Scapegoating or Following the Flag or both?

Abstract

I explore the relationship between US-China tensions, US partisan conflict and global oil prices over the last 20 years. Using lag-augmented local projections, I find empirical support for both the scapegoating hypothesis and the “following the flag” hypothesis. For the scapegoating hypothesis, a rise of US partisan conflict lead to an increase in US-China tension and a reduction of the global prices of oil in the medium run. For the “following the flag” hypothesis, a rise in US-China tension lead to a reduction of US partisan conflict and a reduction of the global prices of oil in the short run. Overall, I underline a new channel through which the domestic economy can be influenced by geopolitical tensions.

• Item Type: MPRA Paper
• Language: English
• Keywords: US-China Tensions; US Partisan Conflict; Global Oil Prices
• Subjects: F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance; F - International Economics > F5 - International Relations, National Security, and International Political Economy; F - International Economics > F6 - Economic Impacts of Globalization

References

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