Effects of oil shocks on EMU exports: technological level differences

Issue: 4/2017

Bohdan Vahalík

VŠB-Technical University of Ostrava, Economic Faculty, Department of European Integration, Sokolská třída 33, 701 21 Ostrava, Czech Republic, e-mail: bohdanvahalik@gmail.cz

Martin Hodula

VŠB-Technical University of Ostrava, Economic Faculty, Department of Economics, Sokolská třída 33, 701 21 Ostrava, Czech Republic, e-mail: martin.hodula@vsb.cz

This article provides some new empirical perspectives on the relationship between oil-market fluctuations and technological structure of EMU export. We rely on a time-varying parameter VAR model to capture the reaction of different technological structures of EMU export to various oil-market innovations in the period 2002-2015. Our results can be summarized as follows: (1) increase in crude oil production is likely to reduce oil prices and therefore increases all EMU exports due to lower production and transportation costs; (2) increase in global demand is more likely to be transmitted to goods with higher added value; (3) high-tech exports decrease in the first months after the global demand shock as a result of a delayed investment decision process; (4) increasing oil prices yield only marginal effect on EMU export.

Pages: 
399-423
DOI: 10.1515/revecp-2017-0022
JEL: Q43, Q41, O52, F14, C32
Keywords: TVP-VAR, technological structure, export, EMU
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