Energy markets and global economic conditions

Baumeister, C., Korobilis, D. and Lee, T. (2022) Energy markets and global economic conditions. Review of Economics and Statistics, 104(4), pp. 828-844. (doi: 10.1162/rest_a_00977)

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This paper evaluates alternative indicators of global economic activity and other market fundamentals in terms of their usefulness for forecasting real oil prices and global petroleum consumption. We find that world industrial production is one of the most useful indicators that has been proposed in the literature. However, by combining measures from a number of di¤erent sources we can do even better. Our analysis results in a new index of global economic conditions and new measures for assessing future tightness of energy demand and expected oil price pressures. We illustrate their usefulness for quantifying the main factors behind the severe contraction of the global economy and the price risks faced by shale oil producers in early 2020.

Item Type:Articles
Glasgow Author(s) Enlighten ID:Korompilis Magkas, Professor Dimitris
Authors: Baumeister, C., Korobilis, D., and Lee, T.
Subjects:H Social Sciences > HA Statistics
H Social Sciences > HG Finance
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Review of Economics and Statistics
Publisher:MIT Press
ISSN (Online):1530-9142
Published Online:24 September 2020
Copyright Holders:Copyright © 2020 President and Fellows of Harvard College and the Massachusetts Institute of Technology
First Published:First published in Review of Economics and Statistics 104(4): 828-844
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher

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