The impact of disaggregated oil shocks on state-level consumption of the United States

Gupta, Rangan and Sheng, Xin and van Eyden, Reneé and Wohar, Mark (2020) The impact of disaggregated oil shocks on state-level consumption of the United States. Applied Economics Letters. ISSN 1466-4291

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Official URL: http://dx.doi.org/10.1080/13504851.2020.1854439

Abstract

We analyse the impact of oil supply, global economic activity, oil-specific consumption demand and oil inventory demand shocks on state-level consumption of the United States (U.S.) over the period of 1975:Q1 to 2012:Q2. We find that positive economic activity shocks and oil production shocks (associated with increase and decrease in oil prices, respectively) increase consumption growth. At the same time, oil-specific consumption and inventory demand shocks raise oil prices and reduce the growth rate of state-level consumption. Across the shocks, the strongest effect originates from the global demand shock. In addition, our above observations are virtually invariant to the degree of oil dependency (oil consumed minus oil produced as a ratio of oil consumed) of the states. Our results have important policy implications.

Item Type: Journal Article
Keywords: Social Sciences, Economics, Business & Economics, Oil shocks, state-level consumption, oil dependency, local projection model, impulse response functions
Faculty: Faculty of Business & Law
SWORD Depositor: Symplectic User
Depositing User: Symplectic User
Date Deposited: 12 Apr 2021 14:09
Last Modified: 09 Sep 2021 16:05
URI: https://arro.anglia.ac.uk/id/eprint/706473

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