{
  "title": "Oil Shocks in a Global Perspective: Are they Really That Bad?",
  "publication": "IMF Working Papers, August 1, 2011",
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  "summary": "Using a comprehensive global dataset, we outline stylized facts characterizing relationships between crude oil prices and macroeconomic developments across the world.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Using a comprehensive global dataset, the paper outlines stylized facts characterizing relationships between crude oil prices and macroeconomic developments across the world.\n- Main empirical finding: a 25 percent increase in oil prices typically causes GDP to fall by about half of one percent or less in oil-importing economies.\n- Cross-country differences in impact depend mainly on the relative size of oil imports.\n- Oil price shocks are not always costly for oil-importing countries: although higher oil prices increase the import bill, there are partly offsetting increases in external receipts.\n- The paper provides a small open economy model illustrating the main transmission channels of oil shocks and shows how the recycling of petrodollars may mitigate the impact."
    },
    {
      "heading": "Key empirical findings and statistics",
      "content": "- \"25 percent increase in oil prices\" — typical shock size used in presentation of impact.\n- Impact on oil-importing economies: \"typically causes GDP to fall by about half of one percent or less.\"\n- Cross-country heterogeneity: depends mainly on the relative size of oil imports.\n- Offsetting mechanism: higher oil prices → higher import bill, but \"partly offsetting increases in external receipts.\""
    },
    {
      "heading": "Model and transmission channels",
      "content": "- The authors present a small open economy model to illustrate main transmission channels of oil shocks.\n- The model highlights the role of external receipts and the recycling of petrodollars in mitigating the adverse effects of higher oil prices on oil-importing economies."
    },
    {
      "heading": "Policy-relevant implications",
      "content": "- The recycling of petrodollars can mitigate the impact of oil price shocks on oil-importing economies.\n- Policy focus should consider the size of oil imports relative to the economy when assessing vulnerability to oil price shocks.\n- Recognition that oil price increases can generate partly offsetting external receipts suggests that the net macroeconomic cost to oil-importing countries may be smaller than implied by import-bill changes alone.\n\n---\n\n Content in this bundle\n\n- wp11194\n  - wp11194 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp11194 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/oil-shocks-in-a-global-perspective-are-they-really-that-bad-25164"
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    "Authors: Tobias N. Rasmussen, Agustin Roitman",
    "Published: August 1, 2011",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781462305254.001",
    "Using a comprehensive global dataset, the paper outlines stylized facts characterizing relationships between crude oil prices and macroeconomic developments across the world.",
    "Main empirical finding: a 25 percent increase in oil prices typically causes GDP to fall by about half of one percent or less in oil-importing economies.",
    "Cross-country differences in impact depend mainly on the relative size of oil imports.",
    "Oil price shocks are not always costly for oil-importing countries: although higher oil prices increase the import bill, there are partly offsetting increases in external receipts.",
    "The paper provides a small open economy model illustrating the main transmission channels of oil shocks and shows how the recycling of petrodollars may mitigate the impact.",
    "\"25 percent increase in oil prices\" — typical shock size used in presentation of impact.",
    "Impact on oil-importing economies: \"typically causes GDP to fall by about half of one percent or less.\"",
    "Cross-country heterogeneity: depends mainly on the relative size of oil imports.",
    "Offsetting mechanism: higher oil prices → higher import bill, but \"partly offsetting increases in external receipts.\"",
    "The authors present a small open economy model to illustrate main transmission channels of oil shocks.",
    "The model highlights the role of external receipts and the recycling of petrodollars in mitigating the adverse effects of higher oil prices on oil-importing economies.",
    "The recycling of petrodollars can mitigate the impact of oil price shocks on oil-importing economies.",
    "Policy focus should consider the size of oil imports relative to the economy when assessing vulnerability to oil price shocks.",
    "Recognition that oil price increases can generate partly offsetting external receipts suggests that the net macroeconomic cost to oil-importing countries may be smaller than implied by import-bill changes alone.",
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