In this paper we assess the impact of oil price shocks on oil-producer and oil-consuming
economies. VAR models for different countries are linked together via a trade matrix, as in
Abeysinghe (2001). As expected, we find that oil producers (here, Russia and Canada)
benefit from oil price shocks. For example, a large oil shock leading to a price increase of
50% boosts Russian GDP by about 6%. However, oil producers are hurt by indirect effects of
positive oil price shocks, as economic activity in their exporter countries suffers. For oil …

In this paper we assess the impact of oil price shocks on oil-producer and oil-consumer
economies. VAR models for different countries are linked together via a trade matrix, as in
Abeysinghe (2001). As expected, we find that oil producers (Russia and Canada here)
benefit from oil price shocks. For example, a large oil shock, leading to a price increase of
50%, boosts Russian GDP by some 12%. However, oil producers are hurt by indirect effects
of oil shocks, as economic activity in their export countries suffers. For oil consumers, the …