154043 - The influence from a demand perspective with real economic activity.pdf (1.4 MB)
The influence from a demand perspective with real economic activity: China versus the United States in world oil markets
journal contributionposted on 2023-05-21, 14:36 authored by Cross, J, Bao NguyenBao Nguyen, Zhang, B
In this paper, we provide direct evidence on an increasingly critical role of China in the world oil markets. Specifically, our empirical results confirm that the influence of China's oil demand on the oil price of the world has increased over time and surpassed that of the United States. The contribution of demand perspective from China are formally quantified by three key variables of world oil market, which are world oil production, real economic activity and the real price of crude oil. The impact of oil demand from China is used to compared with those from other oil markets, including shocks from the United States. We also construct suitable proxies that reflect real economic activity from these economies, and identify them via a structural vector autoregressive model to disentangle the influence of oil demand from China, the United States and the rest of the world. Our results confirm the finding of recent research, which is the increasing demand for oil from developing countries has become a key driver of the price of oil.
Publication titleCarbon Neutralization
PublisherJohn Wiley & Sons, Inc.
Place of publicationUnited States
Rights statement© 2022. The Authors. Carbon Neutralization published by Wenzhou University and John Wiley & Sons Australia, Ltd. This article is licensed under a Creative Commons Attribution 4.0 International (CC BY 4.0) License (https://creativecommons.org/licenses/by/4.0/), which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.