Causality from Oil Price Shocks to Macroeconomic Indicators: A Comparison for Top Oil Importer Countries

This study presents the causality effects of oil price shocks on the main macroeconomic indicators for five developed and five developing top oil importer countries. To test the causality relationship between oil price shocks and macroeconomic variables, Hatemi-J (2011) panel asymmetric causality test is performed. Results show that while negative shocks positively affect developing countries’ GDP, positive shocks negatively affect developed countries' GDP. Although oil prices have a significant role in Turkiye’s, Poland’s, Germany’s, and Italy’s inflation rate, the pass-through effect is incomplete. Regarding unemployment, while positive oil price shocks increase unemployment in China and Turkiye, among the developed countries, only Germany and Singapore experience a rise in unemployment. As a result, the most negatively affected developed countries are detected as Germany and Singapore. On the other hand, among the developing countries, the most negatively affected country is identified as Turkiye. Therefore, these countries should shift to alternative energy resources to eliminate the negative effects of oil price shocks.