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Not all oil shocks on the trade balance are alike: Empirical evidence from South Korea

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  • Jungho Baek

Abstract

The primary interest in the present article lies in the contribution to the existing literature by investigating the impacts that three components of oil shocks—oil supply shocks, aggregate demand shocks and oil‐specific demand shocks—have on three measures of South Korea's trade balances—oil, non‐oil and total trade balances. We reveal that aggregate demand shocks have significant impacts, while oil supply and oil‐specific demand shocks have negligible impacts. Additionally, the overall impact of the three oil shocks on South Korea's trade balances appears to rely on the response of the non‐oil trade balance.

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  • Jungho Baek, 2022. "Not all oil shocks on the trade balance are alike: Empirical evidence from South Korea," Australian Economic Papers, Wiley Blackwell, vol. 61(2), pages 291-303, June.
    • Handle: RePEc:bla:ausecp:v:61:y:2022:i:2:p:291-303
    DOI: 10.1111/1467-8454.12248
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    References listed on IDEAS

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    1. Backus, David K. & Crucini, Mario J., 2000. "Oil prices and the terms of trade," Journal of International Economics, Elsevier, vol. 50(1), pages 185-213, February.
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    11. Jungho Baek & Yoon Jung Choi, 2020. "Do oil price changes really matter to the trade balance? Evidence from Korea‐ASEAN commodity trade data," Australian Economic Papers, Wiley Blackwell, vol. 59(3), pages 250-278, September.
    12. Baek, Jungho, 2020. "An asymmetric approach to the oil prices-trade balance nexus: New evidence from bilateral trade between Korea and her 14 trading partners," Economic Analysis and Policy, Elsevier, vol. 68(C), pages 199-209.
    13. Jungho Baek & Kyoung Doug Kwon, 2019. "Asymmetric effects of oil price changes on the balance of trade: Evidence from selected African countries," The World Economy, Wiley Blackwell, vol. 42(11), pages 3235-3252, November.
    14. Jungho Baek & Monday Jerry Ikponmwosa & Yoon Jung Choi, 2019. "Crude oil prices and the balance of trade: Asymmetric evidence from selected OPEC member countries," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 28(5), pages 533-547, July.
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    Cited by:

    1. Vatsa, Puneet & Baek, Jungho, 2023. "Asymmetric influence of oil demand and supply shocks on meat commodities," Energy Economics, Elsevier, vol. 128(C).
    2. Vatsa, Puneet & Baek, Jungho, 2024. "Asymmetric effects of oil demand and oil supply shocks on New Zealand's trade," Resources Policy, Elsevier, vol. 92(C).

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