Oil Prices, Economic growth, Canada, Gross Domestic Product (GDP), USA
The effects of oil prices on economies has been subjected to a lot of scrutiny since the 1960’s. This study conducts an analysis of the impact of oil price shocks on two oil exporting nations, Canada and USA. The transmission mechanisms of oil price changes to any economy vary from the supply effect to the demand effect. High crude oil prices impact the Canadian economy and USA through a variety of channels, in both positive and negative ways. Ceteris paribus more revenue is made when oil prices increase. In this study, I run an ordinary least square estimation with time series data from 1960-2017. The analysis showed a 0.20% increase economic growth in Canada and a 0.18% increase in USA when there is percentage increase in oil prices. Thus, there is a positive relationship between oil prices and economic growth.
Keywords: Oil Prices, Economic growth, Canada, Gross Domestic Product (GDP), USA
Dr Yahong Zhang
Dr Dingding Li
Master of Arts
Major Research Paper