TITLE:
Quantifying the Microeconomic and Macroeconomic Impact of the Recent Crude Oil Price Fluctuations
AUTHORS:
Peng Xu, Utsav Adhikari, Lei Guo, Deepa Sathaye, Jihua Wang, Dongliang Yi, Yizhi Zhu
KEYWORDS:
Crude Oil, Airline, Hedging, Asymmetric Effects, Microeconomics, Macroeconomics
JOURNAL NAME:
Open Journal of Statistics,
Vol.6 No.4,
August
15,
2016
ABSTRACT: This study analyzed the potential impact of
the increased oil volatility on the industries and the global economy.
Specifically, it separated the oil price fluctuations into positive and
negative components, and modeled the return of industry portfolios with them.
Next, the sensitivity of the airline industry to oil price was investigated to
gauge the effectiveness of their hedging strategies, with the hope that the
methodology can be extended to other industries. In addition, this paper
explored the macroeconomic impact of oil price movements by examining the
benchmarks such as GDP and CPI.