Industry effects of oil price shocks: A re-examination

Soojin Jo, Lilia Karnizova, Abeer Reza

Research output: Contribution to journalArticlepeer-review

14 Citations (Scopus)


Sectoral responses to oil price shocks help determine how these shocks are transmitted throughout the economy. Textbook treatments of oil price shocks often emphasize negative supply, or cost, effects on oil importing countries. By contrast, the seminal contribution of Lee and Ni (2002) has shown that almost all U.S. industries experience oil price shocks largely through a reduction in their respective demands. Only industries with very high oil intensities face a supply-driven reduction. In this paper, we re-examine this seminal finding using two additional decades of data. Further, we apply updated empirical methods, including structural factor-augmented vector autoregressions that take into account how industries are linked among themselves and with the remainder of the macro-economy. Our results confirm the original finding of Lee and Ni that demand effects of oil price shocks dominate in all but a handful of U.S. industries.

Original languageEnglish
Pages (from-to)179-190
Number of pages12
JournalEnergy Economics
Publication statusPublished - 2019 Aug

Bibliographical note

Publisher Copyright:
© 2018

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Energy(all)


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