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Recycling Petrodollars

7 Pages Posted: 17 Jul 2008  

Matthew Higgins

Federal Reserve Bank of New York

Thomas Klitgaard

Federal Reserve Bank of New York

Robert Lerman

Federal Reserve Bank of New York

Abstract

In recent years, oil-exporting countries have experienced windfall gains with the rise in the price of oil. A look at how oil exporters "recycle" their revenues reveals that roughly half of the petrodollar windfall has gone to purchase foreign goods, especially from Europe and China, while the remainder has been invested in foreign assets. Although it is difficult to determine where the funds are first invested, the evidence suggests that the bulk are ending up, directly or indirectly, in the United States.

Keywords: petrodollars, financial, flows, oil, oil-exporters, recycling

JEL Classification: F32, F34, F21, F41

Suggested Citation

Higgins, Matthew and Klitgaard, Thomas and Lerman, Robert, Recycling Petrodollars. Current Issues in Economics and Finance Vol. 12, No. 9, December 2006. Available at SSRN: https://ssrn.com/abstract=957779

Matthew Higgins (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Thomas Klitgaard

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Robert Lerman

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

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