Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in International Economics
Energy Price Shocks And External Balances, Bao Tan Huynh
Energy Price Shocks And External Balances, Bao Tan Huynh
Research Collection School Of Economics
This paper studies the impact of a wide set of energy price shocks on exter- nal balances using a two-country framework comprising multiple sectors and en- dogenous energy production with convex costs. The paper disentangles different demand and supply shocks in the energy market through their distinct impact on external balances. It provides a theoretical confirmation of Kilian et al. (2009) and a theoretical foundation to the determining role of the non-energy trade balance in the transmission of energy price shocks. The presence of durables also highlights the immediate channel through which energy prices impact the non-energy trade balance.