Journal
ENERGY ECONOMICS
Volume 33, Issue 6, Pages 1049-1054Publisher
ELSEVIER
DOI: 10.1016/j.eneco.2011.01.016
Keywords
Oil prices; Euro; Gold; Time series analysis; Markov switching regimes
Categories
Ask authors/readers for more resources
Oil prices increased dramatically during 2004-2006. Industry experts initially attributed these price increases to fundamental factors such as the rise in global demand, but also because of disruptions in the supply of oil. The price increases however were so substantial that additional factors are needed to explain such dramatic changes. We propose that the decline in the value of the U.S. dollar measured both by the appreciation of the Euro and of gold prices, played an important role as oil suppliers demanded compensation for the declining value of the dollar. Using a Markov switching regime methodology we find evidence that this hypothesis is true prior to the financial crisis, but its validity does not hold after the crisis when oil prices crashed and the dollar rallied. (C) 2011 Elsevier B.V. All rights reserved.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available