On 14 May 2018, the National Bank of Ukraine was visited by Dr. Conny Olovsson from the Sveriges Riksbank who gave an open research seminar and presented his recent paper “International Business Cycles: Quantifying the Effects of a World Market for Oil” jointly authored withJohan Gars from the Royal Swedish Academy of Sciences.
During the seminar, Dr. Olovsson discussed how the world economy is affected by the fact that oil as an essential input of production is traded on the world market. In order to capture an empirically evident influence of oil prices on international business cycle, the authors introduce a simple two-country model which, unlike existing traditional models, includes the global oil supply shock being common for all countries as well as county-specific shocks to the efficiency of oil use. Although the energy’s share of output is usually relatively small, oil is treated as a complement to other production factors and, hence, the world market for oil can be quantitatively important for the international business cycle.
Obtained results are of particular importance for macroeconomic modeling, forecasting and policy analysis in countries dependent on oil and other commodities which prices are determined in the world market. Ukraine is a good example of such country since its international trade strongly depends on the world prices. Therefore, understanding the transmission mechanism of global shocks and incorporating it in macroeconomic models is crucial for the conduct of effective economic policy.
Please follow the link to view the research paper in English: https://bit.ly/2jG2VOH.
Video of the seminar: https://bit.ly/2GaCaL7.
The materials of previous open research seminars are available via the link.
We invite potential speakers to attend the following seminars. The materials with the results of scientific research (article and / or presentation), the author's resume and the desired date for the seminar should be sent to the Research Division of the Monetary Policy and Economic Analysis Department at e-mail: [email protected].