Abstract
Previous studies of oil-price economic activity relationships are dominated by macro-level examination of price effects. This study examines the effect of shocks in oil price and its volatility on the oil and gas extraction industry using a Vector Auto-Regressive (VAR) approach. The results show that, in the short-run, positive price and volatility shocks lead to significant increases in oil and gas activities. However, in the long-run, the industry behaves much like the rest of the U.S. economy—price and volatility shocks produce small or insignificant effects.
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Olatubi, W.O., No, S.C. On the vulnerability of the oil and gas industry to oil price changes. Atlantic Economic Journal 31, 363–375 (2003). https://doi.org/10.1007/BF02298494
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DOI: https://doi.org/10.1007/BF02298494