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This paper aims to investigate the dynamic and asymmetric linkage between crude oil, oil uncertainty, and the United States (US) equity markets across various horizons and tails using a combination of a time-frequency approach, Granger causality, and quantile-on-quantile regression from January 2020 to December 2022. The empirical results indicate that causal relationships and the dynamic co-movement between crude oil, oil implied volatility, and the Dow Jones industrial and transportation indices are confirmed across various frequencies through wavelet-based Granger causality and wavelet coherence. Then, the wavelet-based quantile-on-quantile regression shows that the relationship between oil, oil implied volatility, and both US equity markets is heterogeneous and asymmetric across short-and long-run horizons, in particular. The findings provide new insights into the sensitivity of US stock markets to oil shocks across various time frequencies and tails, offering several portfolio implications useful for heterogeneous investors and portfolio managers. [ABSTRACT FROM AUTHOR]

We provide new evidence on the response of investment to uncertainty, using granular and high‐frequency (weekly) data on domestic oil drilling and oil prices since 2012, corresponding to the period of widespread horizontal drilling and hydraulic fracturing in the United States. Weekly data permits much weaker identifying restrictions than is required with monthly data that is common in the literature. We measure domestic drilling activity by the number of rigs drilling for oil, and we measure oil uncertainty by implied volatility from options on oil futures and the return on delta‐neutral straddles from options on oil futures. We show that the number of oil drilling rigs are tightly linked to both oil prices and oil uncertainty, and we find that oil uncertainty significantly decreases the number of drilling rigs, with a one standard deviation increase in uncertainty reducing the number of drilling rigs by up to 5%. [ABSTRACT FROM AUTHOR]

This paper investigates the relationship between the price of oil and real output in the United States in the context of a Markov regime switching, identified, structural GARCH-in-Mean VAR model with copulas. We use the copula method to investigate the nonlinear dependence structure, as well as (upper and lower) tail dependence, between the price of oil and real output growth, and Markov regime switching to account for changing oil price dynamics over the sample period. We find an asymmetric negative dependence structure between oil price and output growth shocks and that oil price uncertainty has a negative and statistically significant effect on real output growth. [ABSTRACT FROM AUTHOR]

We investigate whether the United States economy responds negatively to oil price uncertainty and whether oil price shocks exert asymmetric effects on economic activity. In doing so, we use monthly data and modify the (Elder and Serletis J Money Credit Bank 42, 1138–1159, 2010) bivariate structural GARCH-in-Mean VAR to accommodate the interaction between oil price uncertainty and the climate risk factors recently constructed by Faccini et al. (2021). We find evidence that oil price uncertainty has a negative and statistically significant effect on the growth rate only when it intereacts with the Faccini et al. (2021) international summits textual factor. [ABSTRACT FROM AUTHOR]

This paper collects monthly data for the United States from January 2005 to April 2021 and develops a time-varying parameter vector autoregressive model with stochastic volatility (TVP-SV-VAR) model to investigate the time-varying relationship between climate policy uncertainty, oil prices, and renewable energy consumption. In addition, this paper discusses the dynamic impact of climate policy uncertainty on five types of renewable energy consumption. Our results show that the relationship between them is time-varying. In most periods, climate policy uncertainty positively affects oil prices in the short and medium term, and positively affects total renewable energy consumption in the short and long term. In addition, the impact of climate policy uncertainty on the consumption of the five types of renewable energy is heterogeneous. The results of the robustness tests indicate that our results are robust and our study has important implications for the development of relevant policies. [ABSTRACT FROM AUTHOR]

Purpose: This paper examines the time-varying return connectedness between renewable energy, oil, precious metals, the Gulf Council Cooperation region and the United States stock markets during two successive crises: the pandemic Covid-19 and the 2022 Russo-Ukrainian war. The main objective is to investigate the effect of the Covid-19 pandemic and the Russo-Ukrainian war on the connectedness between the considered stock markets. Design/methodology/approach: This paper uses the time-varying parameter vector autoregression approach, which represents an extension of the Spillover approach (Diebold and Yilmaz, 2009, 2012, 2014), to examine the time-varying connectedness among stock markets. Findings: This paper reflects the effect of the two crises on the stock markets in terms of shock transmission degree. We find that the United States and renewable energy stock markets are the main net emitters of shocks during the global period and not just during the two considered crises sub-periods. Oil stock market is both an emitter and a receiver of shocks against Gulf Council Cooperation region and United States markets during the full sample period, which may be due to price fluctuation especially during the two crises sub-periods, which suggests that the future is for renewable energy. Originality/value: This paper examines the effect of the two recent and successive crises, the Covid-19 pandemic and the 2022 Russo-Ukrainian war, on the connectedness among traditional stock markets (the United States and Gulf Council Cooperation region) and commodities stock markets (renewable energy, oil and precious metals). [ABSTRACT FROM AUTHOR]

This study attempts to empirically estimate the interdependence between COVID-19, tourism market, oil prices, and sustainable climate in United States. In doing so, we employ an advanced Morlet's wavelet approach, namely, Wavelet coherence transform (WCT), Partial and Multiple Wavelet Coherence and found a strong co-movement between variables, which is varied across the time scales, indicating the initial, peak, and after peak effect of COVID-19 on tourism market, oil prices, and carbon emissions using daily data from 6 March 2020 to 6 August 2020. The visuals of WCT exhibit a cyclic (anti-cyclic) relationship between tourism and oil prices, suggesting a strong positive (negative) co-movement in the shorter and longer (medium) period. Tourism and carbon emissions possess a strong positive co-movement across all periods except in the medium run; however, the intensity of this movement is higher in the very short-run compared to medium and longer-run. The results reveal an anti-cyclic association between COVID-19 and tourism, and COVID-19 is leading tourism with strong negative co-movements. Finally, the results describe that carbon emissions and COVID-19 are anti-cyclical and display a positive causality in the shorter run. These results offer valuable guidelines for all stakeholders. [ABSTRACT FROM AUTHOR]

This paper makes use of interdependence theory to analyse the historical development of the economic relations between the GCC countries and the United States. The focus will be on oil and arms trade between the GCC countries and the United States. The results show that while the military and security dependence of the GCC countries on the United States remains relatively intact, the dependence of the United States on the natural resources of the GCC region has decreased. In light of this, the paper suggests that the historical interdependence between the GCC countries and the United States has recently evolved into a unilateral dependence and that the GCC countries' natural resources are directed towards Asian countries. [ABSTRACT FROM AUTHOR]

Our study investigates the dynamic pass‐through of energy prices (crude oil price, electricity price, natural gas price, and coal price) to real house price in the United States using the data from 1970 to 2017. Based on the autoregressive distributed lag (ARDL) model, the empirical results suggest an incomplete pass‐through for all the energy prices to real house price both in the long run and short run except for long‐run pass‐through of crude oil price which is complete with statistically insignificant parameter. The Granger causality results reveal a feedback effect between natural gas price and real house price, output growth and real house price, natural gas price and crude oil price, coal price and electricity price, and output growth and coal price. In addition, a unidirectional causal relationship is found running from crude oil price, natural gas price, real house price, and coal price to electricity price. Again, we find that crude oil price is the cause of coal price in Granger sense. Therefore, our findings provide insights into proper design of energy policy that reduces the transmission of energy price shocks to house price in the United States. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to investigate how the relation between stock returns of US firms and West Texas Intermediate (WTI) oil prices is affected by leverage from 1990 to 2020. Design/methodology/approach: This paper examines how the relationship between stock returns of US firms and WTI oil prices is affected by leverage from 1990 to 2020 using a fixed-effect model estimation framework. Findings: Results from the fixed-effect regression models suggest that leverage effects on stock returns are pervasive both in aggregate and cross-industry levels, while the mining industry is more sensitive. In addition to the positive oil price effects attenuated by leverage at the aggregate level, the authors observe stronger marginal effects of leverage only for the mining sector. Being more exposed to commodity prices, the positive effects of oil prices on stock returns in the mining sector are offset by large debt ratios. Asymmetries, effects of debt maturity structure and implications are also discussed. Research limitations/implications: This study is grounded on the contemporary cash flow claim of leverage NOT on the long-run effect of leverage considering cash flow constraints. The oil price increase is assumed to represent an advancement of the overall economy. This study does not capture the oil prices response to some other economic forces and vice-versa. Practical implications: Mining companies should therefore reduce the stock of debt with respect to their assets to make possible the "pass-through" from oil prices to the stock market. Originality/value: Previously undocumented and the authors show that leverage reduces the total effect of oil prices on stock returns, consistent with the hypothesis. Asymmetric and debt maturity structures effects are also discussed. [ABSTRACT FROM AUTHOR]

In this study, we investigate the impacts of common information between oil futures and the United States stock markets on forecasting oil volatility using the multivariate heterogeneous autoregressive realized volatility model. We have several noteworthy findings. First, the in‐sample estimation results show that the negative returns and the 'bad' jumps have larger influence on oil futures volatility than positive returns and 'good' jumps, respectively. Second, the out‐of‐sample results further indicate that our multivariate heterogeneous autoregressive (HAR) model can generate higher forecast accuracy than individual HAR model for the realized volatility‐type models, which highlights the importance of incorporating volatility information from the stock Market. Third, our findings are robust across the direction‐of‐change test and different windows. Furthermore, from the perspective of the investors' allocation portfolio in the future, the use of common information can also bring greater gains. [ABSTRACT FROM AUTHOR]

This paper evaluates the impact of climate policy uncertainty on renewable and non-renewable energy consumption in the United States over the quarterly data from 2000Q1 to 2021Q3. Economic growth and crude oil prices are added to the energy consumption functions as control variables. The paper considers several approaches to model both renewable and non-renewable energy demand. It is found that crude oil prices promote non-renewable energy demand and climate policy uncertainty reduces it. Surprisingly, the impact of economic growth on non-renewable energy consumption is positive but insignificant. It is also observed that economic growth promotes renewable energy demand, and crude oil prices reduce it. Furthermore, climate policy uncertainty positively affects renewable energy demand in the long run. Some policy implications are provided for reducing non-renewable energy consumption and promoting renewable energy use in the United States through climate policy implementation. • We examine the impact of the Climate Policy Uncertainty (CPU) on renewable and non-renewable energy consumption. • We use the quarterly data from 2000Q1 to 2021Q3 in the United States. • The CPU reduces non-renewable energy demand. • The CPU positively affects renewable energy demand in the long run. • Promoting renewable energy use through climate policy implementation is discussed. [ABSTRACT FROM AUTHOR]

Copyright of Global Strategis is the property of Universitas Airlangga and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Purpose: The purpose of this study is to examine oil price shocks on US shale oil supply and energy security during the period 2000q1–2020q4. Design/methodology/approach: In this study, the Shannon–Wiener index was used to calculate energy security, and then a structural vector autoregression (VAR) was applied to measure the effect of oil price shocks. Findings: The results of the variance decomposition indicate that oil prices account for about 20% of changes in US shale oil production, while it explains only about 3% of changes in energy security. Finally, historical decomposition confirms the results of impulse response functions. Originality/value: The novelty of this study is that so far, no study has examined the effect of oil price shock on shale oil production and energy security in the USA using the structural VAR model. This study also used the latest Shannon–Wiener index as a measure of energy security in the USA. The reason for selecting this index is that, in addition to considering the share of the total consumption of each primary energy, the share of energy imports from each country as well as the political risk of energy exporting countries to the USA are also included. [ABSTRACT FROM AUTHOR]

This article examines interdependence between oil price shocks and United States economic uncertainty and their effects on global stock markets within a structural VAR model over the last 40 years. I find that aggregate demand shocks cause a transitory rise in global real stock returns, whereas precautionary oil demand and United States economic uncertainty shocks decline the returns. Especially, oil demand shocks significantly increase United States economic uncertainty, indicating that their direct impacts on global stock markets are amplified by its endogenous response. Variance decomposition analysis shows that oil price shocks and United States economic uncertainty explain 17% and 6% of long‐run variations in global real stock returns, respectively. These figures have more than tripled when the model is estimated on post 2000 data, suggesting that oil market fundamentals and United States macro uncertainty are an important determinant of global stock market movements. [ABSTRACT FROM AUTHOR]

This study reviews the relationship between the different types of oil extraction such as horizontal drilling or fracking, or directional drilling, which is a hybrid between vertical and horizontal, on the behavior of West Texas Intermediate crude oil prices. In doing so the study adds a new dimension to the literature on the relationship between oil price and extraction techniques. The analysis is based on statistical properties using the VAR model of Fractional Cointegration, reflecting evidence of cointegration between the series, and indicating a long-term equilibrium relationship. In addition, we apply the wavelet transform to analyze the structural changes in the price of West Texas Intermediate brought about by changes in drilling technology. Our results show that all three forms of extraction and West Texas Intermediate prices reach high levels of correlation, particularly around 2014. We conclude that a decrease in production based on any form of crude oil extraction leads to an increase in the price of crude oil. [ABSTRACT FROM AUTHOR]

Recently, significant interaction has been established for oil price shocks with some economic and financial variables, yet our understanding of the environmental burdens of oil price shocks is still limited. We study the co-movements between oil shocks and CO 2 emissions intensity in the United States from February 1975 to July 2018 using wavelet techniques. Key findings suggest that the dis-aggregation of oil price shocks into demand and supply shocks yield novel insights into the pattern of co-movements between oil shocks-CO 2 emissions relationships across different frequency bands and scales. Moreover, we find that higher oil prices triggered by oil demand and global economic activity shocks cannot serve as a substitute for environmental policies aiming at reducing carbon emissions. Contrary to expectations, we highlight that oil supply shock does not result in lower levels of carbon emissions in the U.S. Besides, we also show that an increase in the intensity of CO 2 emissions leads to more uncertainty in the global oil market and drives down oil inventory across different frequency bands. Given the strong predictability of the oil price shocks for environmental burdens, it is hoped that our results will trigger further discussion on environmental problems. • Co-movements between oil price shocks and CO 2 emissions is investigated for the United States. • The wavelet coherence model is used. • The oil price-CO 2 emissions relationship depends on the source of the shock. • The explanatory power of oil demand shocks is relatively stronger than that of oil inventory shocks. • We find evidence that higher oil prices triggered by oil supply shocks are not likely to curb emissions. [ABSTRACT FROM AUTHOR]

The reduction in oil prices might make crude oil a cheaper alternative to renewable energy (RE). Given this, the present paper examines the effect of fluctuation of oil prices on the use of RE in the United States (US) during the period 1970 to 2018. We constructed two nonlinear autoregressive distributed lag (NARDL) models to examine the effect of the positive and negative oil price shocks on the use of RE in the US. The RE consumption is taken as the dependent variable and the gross domestic product (GDP), Brent crude prices, population density, trade openness, and price index as independent variables. The result revealed that the rise in crude oil price, GDP, and population density will increase RE use in the short run and in the long run as well. Moreover, the study finds that any decrease in oil prices will decrease RE use in the short run and its effect will eventually diminish in the long run. On the policy front, it is suggested that US should raise its energy security by reducing its dependency on imported crude oil and increase the role of RE through the imposition of taxes on oil and increase the base of production and consumption through a series of measures. [ABSTRACT FROM AUTHOR]

We analyse the impact of oil supply, global economic activity, oil-specific consumption demand and oil inventory demand shocks on state-level consumption of the United States (U.S.) over the period of 1975:Q1 to 2012:Q2. We find that positive economic activity shocks and oil production shocks (associated with increase and decrease in oil prices, respectively) increase consumption growth. At the same time, oil-specific consumption and inventory demand shocks raise oil prices and reduce the growth rate of state-level consumption. Across the shocks, the strongest effect originates from the global demand shock. In addition, our above observations are virtually invariant to the degree of oil dependency (oil consumed minus oil produced as a ratio of oil consumed) of the states. Our results have important policy implications. [ABSTRACT FROM AUTHOR]

The price formation of crude oil and its refined products plays an essential role in the global economic system and mainly in the United States, where any shock on this market has implications for the different concerned parties. In this sense, we employ the fractionally cointegrated vector autoregressive model to analyze the long-run relationship between crude oil and each refined product and the persistence of the error term resulting, i.e., the crack spread, simultaneously. Once the cointegrating relationships between crude oil price and each refined product price are tested, we also evidence that the order of integration of the crack spread displays a long memory process. Finally, by attending to the coefficient adjustments, supply-driven market integration is given. Additionally, the Verleger hypothesis is rejected for all refined products, corroborated by the component share. This paper has important policy implications for investors, energy policymakers and refiners. [ABSTRACT FROM AUTHOR]

Motivated by the complex dynamics between the oil and stock markets, this study develops a dynamic Markov regime switching‐copula‐extreme value theory model to quantitatively investigate financial contagion and its characteristics between these two markets. The proposed model is applied to daily returns on crude oil prices and the stock markets in the United States and China over six major extreme downside risk events. We find that financial contagion is shorter, stronger, and more susceptible to extreme downside shocks in the United States than in China. In addition, the COVID‐19 crisis shows the largest financial contagion compared with previous crises. [ABSTRACT FROM AUTHOR]

This article extend the body of knowledge in the environmental sustainability literature by exploring the spillover effect across the United States' carbon emissions from sectoral energy consumption: from the commercial sector (CEM), transport sector (TEM), industrial sector (IEM), residential sector (REM), electric power sector (EEM). From this perspective, this study accounted for world pandemic uncertainty index (WPU) in retrospect of global episodes (coronavirus pandemic), crude oil price (WTI), and disposable income per capita (DIC). To this end, the novel spillover methodology of Diebold and Yilmaz is employed in the context of the United State for the period January 1996-February 2020. Our Study shows that total spillover effect from the forecast error variance decomposition (FEVD) is 51.1%, while the rest 48.9% of the forecast variance is attributed to the idiosyncratic shocks. Furthermore, a significant contribution of 113.9% spillover effect from uncertainty due to pandemics to TME, IEM, REM, EEM, CEM, DIC, and WTI. Our study adds to the spillover index and computed the net spillover index between the outlined variables that shows the variance between the contribution of spillover to and from the spillover dynamics. Importantly, the study found that WTI, DIC, IEM, EEM, and CEM received a net spillover shock of 63.80%, 25.90%, 48.80%, 26.10%, and 53.3% from the total spillover index. However, WPU, TEM and REM are a net transmitter of spillover effect of 111.7%, 56.90%, and 48.50% respectively. These outcomes are instructive as decision-makers, stakeholders, and players in the energy sector and oil/energy market are required to pay more focus on sectors that are a net transmitter of spillover shocks such as the world pandemic uncertainty and as well those that are net receivers. [ABSTRACT FROM AUTHOR]

The article explores how economic activity in the U.S. manufacturing sector grew in April 2021 with the overall economy reaching an 11th consecutive month of growth. Topics include shortages of critical basic materials, rising commodities prices, and difficulties in transporting products are continuing to affect all segments of the manufacturing economy; and explain the clouds the members are seeing gathering on their companies' horizons.

Methane emissions associated with the production, transport, and use of oil and natural gas increase the climatic impacts of energy use; however, little is known about how emissions vary temporally and with commodity prices. We present airborne and ground-based data, supported by satellite observations, to measure weekly to monthly changes in total methane emissions in the United States' Permian Basin during a period of volatile oil prices associated with the COVID-19 pandemic. As oil prices declined from ∼ USD 60 to USD 20 per barrel, emissions changed concurrently from 3.3 % to 1.9 % of natural gas production; as prices partially recovered, emissions increased back to near initial values. Concurrently, total oil and natural gas production only declined by ∼ 10 % from the peak values seen in the months prior to the crash. Activity data indicate that a rapid decline in well development and subsequent effects on associated gas flaring and midstream infrastructure throughput are the likely drivers of temporary emission reductions. Our results, along with past satellite observations, suggest that under more typical price conditions, the Permian Basin is in a state of overcapacity in which rapidly growing associated gas production exceeds midstream capacity and leads to high methane emissions. [ABSTRACT FROM AUTHOR]

The current petrodollar system has become a key factor in US economic power by creating external demand for US dollars and treasury bonds, which has allowed accumulation of the state debt without any change in actual credit solvency. The mechanism of this interaction is based on the conclusion of an agreement between the United States and Saudi Arabia, to which joined other OPEC countries subsequently. As a result, OPEC countries pledged to sell oil on the world market exclusively for US dollars. In exchange, the United States granted preferential loans and technology to petroleum exporting countries. An increase in oil production in the United States alongside growth in exports has neutralized US dependence on oil supplies from OPEC countries, resulting in the transformation of the petrodollar system and a shift in the balance of power in the world oil market. The US had no need to interact with OPEC countries, and the strengthening of sanctions imposed by Western countries against third countries has contributed to the establishment of a new balance of power in the oil market, through coordination between OPEC+ exporters. A key feature of the change in the position on the world oil market was the new status of the United States, turning from one of the leading oil importers to a world-class exporter. This situation led to a reorientation of OPEC to other markets and to competition with the United States for a share of the world oil market. As a response, the OPEC+ format was created, which led to an increased influence of exporting countries on the oil market, which is confirmed by the conclusions of the built mathematical model based on the analysis of correlation dependencies of dependent and independent variables used to construct regression equations. The dynamics of world oil market prices and the median values of OPEC countries' currencies against the US dollar were selected as dependent variables. Variables that impact the formation of dependent values are the US dollar index, the level of oil production by OPEC countries and the interest rate on federal funds of the US Federal Reserve. The equations and correlation analysis were based on monthly data from January 2007 to October 2020. To assess the changed nature of the influence of OPEC countries on the global dynamics of oil prices, the time interval was divided into two intervals. The first selected time interval covers the period before the creation of the OPEC+ format: January 2007 - November 2016. Accordingly, the second selected time interval includes the duration of the OPEC+ agreement: December 2016-October 2020. To determine the effective influence of the considering variables on the results obtained at the initial stage, the correlation value was set within - 0.5 d" R e" 0.5, which allowed us to filter out variables with insignificant correlation. After obtaining the correlation dependencies, all pairs of dependent and independent variables were analyzed for approximating functions, which allowed us to study the nature of the dependence in more detail and more accurately construct the regression equations. [ABSTRACT FROM AUTHOR]

For policy decisions, capturing seasonal effects in impulse responses are important for the correct specification of dynamic models that measure interaction effects for policy-relevant macroeconomic variables. In this paper, a new multivariate method is suggested, which uses the score-driven quasi-vector autoregressive (QVAR) model, to capture seasonal effects in impulse response functions (IRFs). The nonlinear QVAR-based method is compared with the existing linear VAR-based method. The following technical aspects of the new method are presented: (i) mathematical formulation of QVAR; (ii) first-order representation and infinite vector moving average, VMA (∞), representation of QVAR; (iii) IRF of QVAR; (iv) statistical inference of QVAR and conditions of consistency and asymptotic normality of the estimates. Control data are used for the period of 1987:Q1 to 2013:Q2, from the following policy-relevant macroeconomic variables: crude oil real price, United States (US) inflation rate, and US real gross domestic product (GDP). A graphical representation of seasonal effects among variables is provided, by using the IRF. According to the estimation results, annual seasonal effects are almost undetected by using the existing linear VAR tool, but those effects are detected by using the new QVAR tool. [ABSTRACT FROM AUTHOR]

Copyright of Mexican Journal of Economics & Finance / Revista Mexicana de Economia y Finanzas is the property of Instituto Mexicano de Ejecutivos de Finanzas and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper studies the dynamic interactions of the ethanol, crude oil and corn market prices in the United States from January 2005 up to December 2014. The empirical analysis, for the shake of robustness, employs alternative time series methodologies based on single equation and system estimation approaches to cointegration and more specifically, the autoregressive distributed lags and the Johansen ML cointegration methodologies were applied complementary. The findings reveal a statistically significant long-run causal effect running from crude oil and corn prices to ethanol price as well as from ethanol and corn prices to crude oil price. Additionally, a positive relationship between crude oil price and ethanol price was revealed. [ABSTRACT FROM AUTHOR]

This paper investigates the causal effects of oil price fluctuations on United States' financial markets using daily oil price and financial market data from 2011 to 2016. To address endogeneity, we follow the heteroscedasticity-based identification strategy by Rigobon (2003) and instrument for changes in oil prices with exogenous shocks on current and future oil supply. We find that a decline in oil price negatively affected markets after 2014 when oil price was very low, but not before 2014 when the price was relatively high. These novel findings suggest oil price level could affect the impact of a decrease in oil prices on financial markets. [ABSTRACT FROM AUTHOR]

A number of economic factors have collided recently: the step drop in the price of oil, uncertainty in the United States and global economies, and mixed signals from economic and political leaders of many countries. All of these conditions have placed companies, especially those affected by oil prices under difficult economic stress. Companies are taking radical actions to, reduce capital and operational spending and in general, reduce cost. These economic pressures can be onerous on all areas of a business, but especially on the production floor‐level operations. Cost‐cutting dicta come from the executive levels, demanding a significant reduction in operating expenses or capital expenditures even when production levels are stable or increasing. While all areas of a company feel the impacts, key process safety impacts are felt on the shop floor; by the exact people, process safety is meant to protect, the operators, maintenance personnel and their supervisors. During these times of extreme economic pressure, it is imperative that process safety systems are not allowed to lose effectiveness. This article is intended to serve as a reminder of some impacts of cost cutting and to present tools to combat the loss of process safety effectiveness. [ABSTRACT FROM AUTHOR]

Since oil is used as an input in the production and delivery process, any change in its price can affect almost all sectors of an economy. Researchers have tried to assess the impact of the rising price of oil on domestic production, inflation, investment, the stock market, etc. In order to determine if inflationary effects of rising oil prices have spread to house prices in the U.S., unlike previous research, we investigate the link between oil prices and house prices by using data from each state of the U.S. Furthermore, for the first time, we engage in asymmetry analysis and find short-run asymmetric effects in almost all of the states but short-run cumulative effects or asymmetric impact in 15 states. Although we also find significant long-run asymmetric effects in 26 states, the results reveal that an increase in oil prices has contributed to house price increase in only 11 states and a decrease in oil prices lowered house prices in only three states. [ABSTRACT FROM AUTHOR]

Previous studies on the effects of oil price changes indicate that oil price pass-through to inflation has decreased in the United States since the Great Moderation. This paper investigates why oil price pass-through has decreased from the viewpoint of an inflationary environment. By estimating a smooth transition autoregressive model that considers past US inflation rates, I show that oil price pass-through is low in a low-inflation environment. This result suggests that the inflationary environment is important in explaining the declining oil price pass-through in the United States. [ABSTRACT FROM AUTHOR]

We estimate the oil price pass-through into consumer prices both in the U.S. and in the euro area. In particular, we disentangle the specific effect that an oil price change might have on each disaggregate price, from the effect on all prices that an oil price change might have since it affects the whole economy. To do so, we first estimate a Dynamic Factor Model on a panel of disaggregate price indicators, and then we use VAR techniques to estimate the pass-through. Our results show that the oil price passes through core inflation only via its effect on the whole economy. This pass-through is estimated to be small, but statistically different from zero and long lasting. [ABSTRACT FROM AUTHOR]

This paper investigates the global macroeconomic consequences of falling oil prices due to the oil revolution in the USA, using a global VAR model estimated for 38 countries/regions over the period 1979Q2–2011Q2. Set identification of the US oil supply shock is achieved through imposing dynamic sign restrictions on the impulse responses of the model. The results show that there are considerable heterogeneities in the responses of different countries to a US supply-driven oil price shock, with real GDP increasing in both advanced and emerging market oil-importing economies, output declining in commodity exporters, inflation falling in most countries, and equity prices rising worldwide. Overall, our results suggest that a US supply-driven oil price shock (equivalent to a 10–12% fall per quarter in the price of oil) results in an increase in global growth by 0.16–0.37 percentage points in the medium term. This is mainly due to an increase in spending by oil-importing countries, which exceeds the decline in expenditure by oil exporters. [ABSTRACT FROM AUTHOR]

We construct a GFAVAR model with newly released global data from the Federal Reserve Bank of Dallas to investigate the drivers of global official/policy interest rate. We find that 66% of movement in global official/policy interest rates is attributed to changes in global monetary aggregates (23%), oil prices (19%), global output (16%) and global prices (8%). Global official/policy interest rates respond significantly to increases in global output, inflation and oil prices. Increases in global policy interest rates are associated with reductions in global prices and global output. The response in official/policy interest rate for the emerging countries is more to global inflation, for the advanced countries (excluding the U.S.) is more to global output, and for the U.S. is to both global output and inflation. [ABSTRACT FROM AUTHOR]

We investigate whether the United States economy responds negatively to oil price uncertainty and whether oil price shocks exert asymmetric effects on economic activity. In doing so, we relax the assumption in the existing literature that the data are governed by a single process, modifying the Elder and Serletis (2010) bivariate structural GARCH‐in‐Mean VAR to accommodate Markov regime switching in order to account for changing oil price dynamics over the sample period. We find evidence of asymmetries, against those macroeconomic theories that predict symmetries in the relationship between real aggregate economic activity and the real price of oil. [ABSTRACT FROM AUTHOR]