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US-China Tensions, US Partisan Conflict and Global Oil Prices: Scapegoating or Following the Flag or both?

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  • Saadaoui, Jamel

Abstract

I explore the relationship between US-China tensions, US partisan conflict and global oil prices over the last 20 years. Using lag-augmented local projections, I find empirical support for both the scapegoating hypothesis and the “following the flag” hypothesis. For the scapegoating hypothesis, a rise of US partisan conflict lead to an increase in US-China tension and a reduction of the global prices of oil in the medium run. For the “following the flag” hypothesis, a rise in US-China tension lead to a reduction of US partisan conflict and a reduction of the global prices of oil in the short run. Overall, I underline a new channel through which the domestic economy can be influenced by geopolitical tensions.

Suggested Citation

  • Saadaoui, Jamel, 2025. "US-China Tensions, US Partisan Conflict and Global Oil Prices: Scapegoating or Following the Flag or both?," MPRA Paper 124152, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:124152
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    References listed on IDEAS

    as
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    5. Afonso, António & Mignon, Valérie & Saadaoui, Jamel, 2024. "On the time-varying impact of China's bilateral political relations on its trading partners: “Doux commerce” or “trade follows the flag”?," China Economic Review, Elsevier, vol. 85(C).
    6. Lutz Kilian, 2009. "Not All Oil Price Shocks Are Alike: Disentangling Demand and Supply Shocks in the Crude Oil Market," American Economic Review, American Economic Association, vol. 99(3), pages 1053-1069, June.
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    More about this item

    Keywords

    US-China Tensions; US Partisan Conflict; Global Oil Prices;
    All these keywords.

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • F6 - International Economics - - Economic Impacts of Globalization

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