The Impact of International Oil Price Shock on China's Economic Growth

Authors: Yi Wu and Bin Zhao*

DOI: 10.23880/oajda-16000124

Volume 2, Issue 1

Abstract

This article takes the impact of international oil price shocks on China's economic growth as the research object, and studies the impact mechanism of international oil price shocks on China's economic development status, providing practical value for the formulation of relevant policies in China. This article selects monthly data from January 2007 to December 2023 as the research interval, and uses the SVAR model to decompose the changes in international oil prices into three different sources of structural oil supply and demand shocks, namely oil supply shocks, oil total demand shocks, and oil specific demand shocks. The research results show that overall, the impact of international oil price shocks on China's economic growth is relatively low. International oil price shocks will have a negative impact on China's economic growth, and the average contribution of the three structural oil supply and demand shocks to China's economic growth does not exceed 13.1%. The impact of specific oil demand shocks on China's economic growth is the greatest, followed by oil supply shocks and total oil demand shocks, which indirectly reflect that China's economic growth is mainly influenced by its own factors.

Keywords: International Oil Price Shocks; Economic Growth; SVAR Model; Variance Decomposition

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