Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
As previously stated, the aim of the paper is to observe and analyse the effects of oil price shocks on key macroeconomic indicators in the UK economy. From this the aim is to conclude whether there is sufficient evidence of a relationship between oil price shocks and economic performance in the UK. Previous studies provided a sound basis and contributed to the initial understanding of this problem. Since the mid-2000s the UK has become a net importer of oil which further emphasised the need to carry out this study, as economic theory suggests that future oil price shocks would have a far greater negative impact on the macroeconomy than when the UK was a net exporter of oil. The most effective method of analysing this problem was to use an unconstrained VAR. From this we found the impulse response functions of the key macroeconomic indicators to a one standard deviation shock in the price of oil.The most interesting findings are described below.
The Granger Causality tests showed that at the 95% significance level, oil price granger caused GDP, inflation and interest rates. The importance of these findings is that theysuggest that any change in the oil price variable will induce further changes in these three variables.
Following on from the causality testing, the Cholesky impulse response functions were estimated. This part of the results is without doubt the most telling about the relationships between oil prices and the remaining variables. The three variables that are Granger caused by oil prices provided very interesting impulse responses. Firstly, as oil prices are a large component in calculating inflation, it was no surprise to observe that following a shock in the oil price, inflation rose sharply and it took five years for the level to revert back to its original level. A similar pattern emerged from the GDP impulse response to oil, although it's maximum and minimum were both within the first five quarters, a lot quicker than for inflation. GDP reverted back to its normal level after approximately 15 quarters, almost four years.
In general, economists have found that as nations' levels of per capita real Gross Domestic Product (GDP) increase, A. the rate of population growth declines. B. the rate of
the classical model assumes that consumption depends positively on disposable income. now suppose that consumption also depends on the real interest rate. a) sketch the loanable
the central economic problem facing the group of survivors
Question 1: Critically analyse the costs of inflation. Which of these items is likely to have encouraged many governments in their adoption of inflation as public enemy number
The number of gallons of paint that Home Depot sells in a given day is normally distributed with a mean of 150 gallons and a standard deviation of 35 gallons (I realize that the di
Question 1: Differentiate between income, price and cross elasticities of demand. How will the concept of price elasticity be useful to the owner of a supermarket who wan
Q. Describe Wages and income? Remember that by wage we characteristically mean what you receive for working one hour, whereas income is the total revenue from all sources over
Changes in demand-Baby diapers and retirement villagesOther things equal, an increase in the number of buyers for a product or service will increase -demand. Baby diapers and retir
Balance of T rade A country's present account reflects a money drain when exports exceed imports. The net distinction in-between the dollar value of a world imports an
Q. Equilibrium in the labor market? Equilibrium in the labor market Real wage W/P will be equal to the equilibrium real wage in the classical model
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd