Oil and Macroeconomic Uncertainty
9 Pages Posted: 23 Jul 2015
Date Written: June 25, 2015
In this article we discuss the concepts of macroeconomic uncertainty, oil price uncertainty and oil price shocks. Given the relevance of oil and macroeconomic uncertainty in both academic research and the political sphere, we illustrate how economic uncertainty can be operationally defined and empirically measured. After surveying some common proxies of macroeconomic uncertainty, we describe our proposed measure of oil price uncertainty, and we illustrate the contribution of its underlying components, namely uncertainties related to oil consumption and production, economic activity and oil inventories.
Keywords: Macroeconomic Uncertainty, Oil Price Uncertainty, Oil Price Shocks, Oil Price
JEL Classification: C32, C58, E44, Q41, Q43
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