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External Capital Structures and Oil Price Volatility

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  • Burger, John D.
  • Rebucci, Alessandro
  • Warnock, Francis E.
  • Cacdac Warnock, Veronica

Abstract

This paper assesses the extent to which a countrys external capital structure can aid in mitigating the macroeconomic impact of oil price shocks. Two Caribbean economies highly vulnerable to oil price shocks are considered: an oil importer (Jamaica) and an oil exporter (Trinidad and Tobago). From a risk-sharing perspective, a desirable external capital structure is one that, through international capital gains and losses, helps offset responses of the current account balance to external shocks. It is found that both countries could alter their international portfolio to provide a better buffer against such shocks.

Suggested Citation

  • Burger, John D. & Rebucci, Alessandro & Warnock, Francis E. & Cacdac Warnock, Veronica, 2010. "External Capital Structures and Oil Price Volatility," IDB Publications (Working Papers) 1127, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:1127
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    Cited by:

    1. Kirsten Roach, 2014. "A Structural Analysis of Oil Price Shocks on the Jamaican Macroeconomy," Monetaria, Centro de Estudios Monetarios Latinoamericanos, CEMLA, vol. 0(2), pages 217-252, July-Dece.
    2. Kirsten Roach, 2014. "Un análisis estructural de los choques de precios del petróleo en la macroeconomía de Jamaica," Monetaria, Centro de Estudios Monetarios Latinoamericanos, CEMLA, vol. 0(2), pages 233-271, julio-dic.

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    More about this item

    Keywords

    IDB-WP-107;

    JEL classification:

    • F3 - International Economics - - International Finance
    • G1 - Financial Economics - - General Financial Markets

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