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Financial liquidity, geopolitics, and oil prices
Energy Economics, Volume: 87, Start page: 104482
Swansea University Author: Hany Mohamed
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DOI (Published version): 10.1016/j.eneco.2019.104482
Abstract
This paper aims simultaneously to study the global dynamic relationship of oil prices, financial liquidity, and geopolitical risk, on the one hand, and the economic performance of oil-exports-dependent economies on the other. Global and country-specific dynamics are studied together in a Global Vect...
| Published in: | Energy Economics |
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| ISSN: | 01409883 |
| Published: |
Elsevier
2019
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| Online Access: |
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| URI: | https://cronfa.swan.ac.uk/Record/cronfa51339 |
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| Abstract: |
This paper aims simultaneously to study the global dynamic relationship of oil prices, financial liquidity, and geopolitical risk, on the one hand, and the economic performance of oil-exports-dependent economies on the other. Global and country-specific dynamics are studied together in a Global Vector Autoregression (GVAR) model that allows different lag structures for different variables in different countries. Global impulse response functions from the estimated model suggest that new waves of high oil prices are unlikely, despite the likely continuation of high global financial liquidity and heightened geopolitical risk, which had driven earlier episodes of very high oil prices. With oil remaining at modest to low prices by recent historical standards, we study the prospects for economic growth in oil-export-dependent economies through dramatic increases in domestic investment, as planned under Visions 2030 of some Arab countries, and conclude that, unfortunately, success is unlikely. |
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| Keywords: |
Geopolitics, Global Liquidity, Oil Prices, MENA Region, Arab Spring, Global VAR |
| College: |
Faculty of Humanities and Social Sciences |
| Start Page: |
104482 |