The paper aims to explore the symmetric impact of oil price shock on economy, to understand its mechanism channel and how fiscal policy response towards it. The Generalized Impulse Response Function and Variance Decomposition under the VAR methodology were employed. The empirical findings suggest that symmetric oil price shock has a positive and direct impact on oil revenue and government expenditure. However, the real GDP is vulnerable in a short-term but not in the long term period. These results would confirm that fiscal policy is the main mechanism channel that mitigates the adverse effects oil price shocks to the economy.
|Journal||IOP Conference Series: Earth and Environmental Science|
|Publication status||Published - 01 Jan 2013|
|Event||26th IAHR Symposium on Hydraulic Machinery and Systems - Beijing, China|
Duration: 19 Aug 2012 → 23 Aug 2012
All Science Journal Classification (ASJC) codes
- Environmental Science(all)
- Earth and Planetary Sciences(all)