Implications of Cheap Oil for Emerging Markets

The COVID-19-triggered collapse in oil prices in March and April 2020 was the seventh, and by far the most severe, in a series of such collapses since 1970. This paper, first, compares this most recent collapse and its drivers with previous ones in...

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Main Authors:	Kabundi, Alain, Ohnsorge, Franziska
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2020
Subjects:	OIL PRICES COVID-19 PANDEMIC IMPACT CORONAVIRUS MACROECONOMIC IMPACT SUPPLY FACTORS DEMAND FACTORS LOCAL PROJECTIONS MODEL EMERGING MARKET ECONOMIES
Online Access:	http://documents.worldbank.org/curated/en/800281600695886152/Implications-of-Cheap-Oil-for-Emerging-Markets http://hdl.handle.net/10986/34501

id	okr-10986-34501
recordtype	oai_dc
spelling	okr-10986-345012022-09-20T00:12:32Z Implications of Cheap Oil for Emerging Markets Kabundi, Alain Ohnsorge, Franziska OIL PRICES COVID-19 PANDEMIC IMPACT CORONAVIRUS MACROECONOMIC IMPACT SUPPLY FACTORS DEMAND FACTORS LOCAL PROJECTIONS MODEL EMERGING MARKET ECONOMIES The COVID-19-triggered collapse in oil prices in March and April 2020 was the seventh, and by far the most severe, in a series of such collapses since 1970. This paper, first, compares this most recent collapse and its drivers with previous ones in an event study. It finds that it was associated with an exceptionally severe plunge in oil demand. Second, in a local projections model, this paper estimates the implications of demand- and supply-driven oil price collapses for growth in emerging markets and developing economies (EMDEs). The paper finds that steep oil price collapses were associated with significant and lasting output losses in energy-exporting EMDEs but no meaningful output gains in energy-importing EMDEs. These results are robust to multiple robustness checks. 2020-09-24T18:31:31Z 2020-09-24T18:31:31Z 2020-09 Working Paper http://documents.worldbank.org/curated/en/800281600695886152/Implications-of-Cheap-Oil-for-Emerging-Markets http://hdl.handle.net/10986/34501 English Policy Research Working Paper;No. 9403 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	OIL PRICES COVID-19 PANDEMIC IMPACT CORONAVIRUS MACROECONOMIC IMPACT SUPPLY FACTORS DEMAND FACTORS LOCAL PROJECTIONS MODEL EMERGING MARKET ECONOMIES
spellingShingle	OIL PRICES COVID-19 PANDEMIC IMPACT CORONAVIRUS MACROECONOMIC IMPACT SUPPLY FACTORS DEMAND FACTORS LOCAL PROJECTIONS MODEL EMERGING MARKET ECONOMIES Kabundi, Alain Ohnsorge, Franziska Implications of Cheap Oil for Emerging Markets
relation	Policy Research Working Paper;No. 9403
description	The COVID-19-triggered collapse in oil prices in March and April 2020 was the seventh, and by far the most severe, in a series of such collapses since 1970. This paper, first, compares this most recent collapse and its drivers with previous ones in an event study. It finds that it was associated with an exceptionally severe plunge in oil demand. Second, in a local projections model, this paper estimates the implications of demand- and supply-driven oil price collapses for growth in emerging markets and developing economies (EMDEs). The paper finds that steep oil price collapses were associated with significant and lasting output losses in energy-exporting EMDEs but no meaningful output gains in energy-importing EMDEs. These results are robust to multiple robustness checks.
format	Working Paper
author	Kabundi, Alain Ohnsorge, Franziska
author_facet	Kabundi, Alain Ohnsorge, Franziska
author_sort	Kabundi, Alain
title	Implications of Cheap Oil for Emerging Markets
title_short	Implications of Cheap Oil for Emerging Markets
title_full	Implications of Cheap Oil for Emerging Markets
title_fullStr	Implications of Cheap Oil for Emerging Markets
title_full_unstemmed	Implications of Cheap Oil for Emerging Markets
title_sort	implications of cheap oil for emerging markets
publisher	World Bank, Washington, DC
publishDate	2020
url	http://documents.worldbank.org/curated/en/800281600695886152/Implications-of-Cheap-Oil-for-Emerging-Markets http://hdl.handle.net/10986/34501
_version_	1764481036388925440

Implications of Cheap Oil for Emerging Markets

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