Is the oil price–output relation asymmetric?

In this paper we investigate the relationship between the real price of oil and industrial production for the G-7 countries, using post-1973 data. We test whether the relationship between industrial production and the real price of oil is symmetric using slope-based tests as well as tests of the null hypothesis of symmetric impulse responses. Based on the impulse response function tests, we find that for France and the United Kingdom the response of the industrial production growth rate to positive and negative oil price shocks is symmetric, for Canada, Germany, Italy, and Japan it is (in general) asymmetric at almost all horizons for both small and large oil price shocks, and for the United States it is symmetric at all horizons for small shocks but asymmetric at all horizons for large shocks.