Social and Behavioral Sciences Commons^™

The Economic Impact Of Oil Price Shocks On Emerging Markets, Aanchal Kapoor

CMC Senior Theses

Recent spikes in oil prices have thrown light on how economic activity in emerging markets may be impacted by oil price shocks. This paper conducts an empirical analysis of the effect of oil price shocks on emerging markets. It tests for the existence of an asymmetrical relationship between oil prices and economic activity using a model developed by James Hamilton. It also assesses the impact of structural shocks to the real price of oil on output as proposed by Lutz Kilian. While our models find no consistent pattern within emerging markets, they do suggest that oil price shocks have a …