Macroeconomics of Oil Prices Name: Jerez Amsyar Student ID: 2390191 ECON 211 (Macroeconomics) Module 6 Research: First Draft Research Paper Macroeconomics of Oil Prices Introduction Oil prices have steadily grew within the past 50 years. This paper discusses the macroeconomics of oil prices and its impact globally. This paper will discuss about the influence of oil price volatility, oil price changes and its impact on economic output, consequences of dynamic oil prices and its impact macroeconomically.
Macroeconomics of Oil Prices The influence of oil price volatility Qianqian (2011) investigated the long run connection between oil price and output CPI, net exports and the monetary policy for the Chinese economy. Rising oil prices cause the net exports and the real GDP to decline and CPI to rise. It has a negative impact on the actual money supply. Du et al. (2010) explored that oil prices effect China’s economic growth and inflation but no effect on China’s output is found on global oil prices, hence oil price exogenous with respect to China. According to Usman et al. (2013), unemployment is badly affected by the oil price volatility. This is because many industries will be affected by higher cost if the price shoots up. Therefore as cost rises, companies may have to try to reduce costs by cutting manpower. Therefore unemployment will rise. Oil price changes and economic output
Macroeconomics of Oil Prices Oil price rises due to the increase in demand in today’s modern technological world. Oil is used for a vast majority of today’s technological advancement such as fuel for transportation, electricity generation, manufacturing of various products etc. A huge impact for oil prices to rise is due to the influence of gigantic developing countries like India and China. These two
- Fall '09