Essays on the Impacts of Oil Price Fluctuations on the Canadian Economy
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Authors
Bakhshi Moghaddam, Mohsen
Date
Type
thesis
Language
eng
Keyword
Heterogeneous effects of oil price shocks , Within-country analysis , Economic growth
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Abstract
This dissertation examines the effects of oil price fluctuations on the Canadian economy at the provincial and sectoral levels, accounting for the heterogeneities in economic activities between two groups of net oil-exporting and net oil-importing Canadian provinces and across different sectors. The first essay employs a nonparametric panel data technique to investigate the impacts of oil price fluctuations on the GDP per capita in two groups of net oil-exporting and net oil-importing provinces in Canada over the period 1984-2016. The results show that the relationship between oil price and GDP per capita is time-varying in both groups of Canadian provinces. While both groups of provinces benefited from the striking hike in oil prices during the 2000s, the relatively low oil prices before 2000 had positive effects only in net oil-importing provinces. Furthermore, the findings highlight the vital role of interprovincial trade in mitigating the adverse effects of oil price volatility on Canadian provinces.
The second essay analyzes the relationship between oil price changes and economic growth in Canadian provinces using the quantile-on-quantile (QQ) approach. The results show that the impacts of oil price changes on Canadian provinces' economic growth are considerably heterogeneous across different quantiles of the two variables. The results also reveal that the oil-economic growth relationship is heterogeneous across Canadian provinces, both within each block of net oil-importing and net oil-exporting provinces and between the two blocks.
In the last essay, I develop a two-sector dynamic stochastic general equilibrium (DSGE) model, incorporating both oil-producing and oil-dependent final goods sectors, to investigate the heterogeneous impacts of oil price shocks on these two sectors. The model's findings reveal that a positive oil price shock has sizable positive effects on the oil-producing sector and shifts the labour force from the final goods sector to the booming oil sector. Furthermore, the results show that the positive oil price shock initially hurts the final goods sector. However, the adverse effects of higher oil prices on this sector are reversed after a relatively short period due to capital accumulation resulting from the positive wealth effects of higher oil prices for Canadian households.
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ProQuest PhD and Master's Theses International Dissemination Agreement
Intellectual Property Guidelines at Queen's University
Copying and Preserving Your Thesis
This publication is made available by the authority of the copyright owner solely for the purpose of private study and research and may not be copied or reproduced except as permitted by the copyright laws without written authority from the copyright owner.