Where is an Oil Shock?

17 Pages Posted: 4 Mar 2014

See all articles by Kristie Engemann

Kristie Engemann

Federal Reserve Bank of St. Louis

Michael Owyang

Federal Reserve Bank of St. Louis - Research Division

Howard J. Wall

Lindenwood University - Center for Economics and the Environment

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Date Written: March 2014

Abstract

Much of the literature examining the effects of oil shocks asks the question “What is an oil shock?” and has concluded that oil‐price increases are asymmetric in their effects on the U.S. economy. That is, sharp increases in oil prices affect economic activity adversely, but sharp decreases in oil prices have no effect. We reconsider the directional symmetry of oil‐price shocks by addressing the question “Where is an oil shock?” the answer to which reveals a great deal of spatial/directional asymmetry across states. Although most states have typical responses to oil‐price shocks - they are affected by positive shocks only - the rest experience either negative shocks only (five states), both positive and negative shocks (five states), or neither shock (five states).

Suggested Citation

Engemann, Kristie and Owyang, Michael T. and Wall, Howard J., Where is an Oil Shock? (March 2014). Journal of Regional Science, Vol. 54, Issue 2, pp. 169-185, 2014, Available at SSRN: https://ssrn.com/abstract=2404136 or http://dx.doi.org/10.1111/jors.12071

Kristie Engemann (Contact Author)

Federal Reserve Bank of St. Louis ( email )

411 Locust St
Saint Louis, MO 63011
United States

Michael T. Owyang

Federal Reserve Bank of St. Louis - Research Division ( email )

411 Locust St
Saint Louis, MO 63011
United States

Howard J. Wall

Lindenwood University - Center for Economics and the Environment ( email )

209 S. Kingshighway
St. Charles, MO 63301
United States

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