Energy price shocks and external balances

In: The Canadian journal of economics: the journal of the Canadian Economics Association = Revue canadienne d'économique, Band 49, Heft 2, S. 789-814

Abstract

AbstractThis paper studies the impact of a wide set of energy price shocks on external balances using a two‐country framework comprising multiple sectors and endogenous 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.