Cited by 371Market Dynamics and VolatilityEconomics of Agriculture and Food MarketsMonetary Policy and Economic Impact

Did Unexpectedly Strong Economic Growth Cause the Oil Price Shock of 2003–2008?

Open access
Kilian, Lutz, Hicks, Bruce·2013·Journal of Forecasting

Abstract

Recently developed structural models of the global crude oil market imply that the surge in the real price of oil between mid 2003 and mid 2008 was driven by repeated positive shocks to the demand for all industrial commodities, reflecting unexpectedly high growth mainly in emerging Asia. We evaluate this proposition using an alternative data source and a different econometric methodology. Rather than inferring demand shocks from an econometric model, we utilize a direct measure of global demand shocks based on revisions of professional real gross domestic product (GDP) growth forecasts. We show that forecast surprises during 2003–2008 were associated primarily with unexpected growth in emerging economies (in conjunction with much smaller positive GDP‐weighted forecast surprises in the major industrialized economies), that markets were repeatedly surprised by the strength of this growth, that these surprises were associated with a hump‐shaped response of the real price of oil that reaches its peak after 12–16 months, and that news about global growth predict much of the surge in the real price of oil from mid 2003 until mid 2008 and much of its subsequent decline. Copyright © 2012 John Wiley & Sons, Ltd.

Integrity signals

Registry

Crossref · 10.1002/for.2243

Cites

Statistics

Recomputing p-values needs the paper’s full text.

Claims the paper makes

We couldn’t retrieve this paper’s full text, so its claims and self-check weren’t run. The registry and citation checks still apply.

Claims other papers make about this one

Each is checked against this paper’s own text: does it say what the citing paper says it does?

  • Professional forecasters persistently underestimated global growth during 2003-2008, especially growth in emerging Asia.

    “Even professional forecasters persistently underestimated global growth during 2003-2008, especially growth in emerging Asia, lending credence to our model results.”

    From THE ROLE OF INVENTORIES AND SPECULATIVE TRADING IN THE GLOBAL MARKET FOR CRUDE OIL (2014) · cites this paper as Kilian and Hicks (2013)

Cited by

Sorted by citations

Authors
Kilian, L., & Hicks, B.
Affiliations
  • University of Michigan (US)
  • University of Wisconsin–Madison (US)
Corresponding author
Kilian, Lutz
Venue
Journal of Forecasting
Publisher
Wiley
Published
2012-04-10
Volume
32
Issue
5
Pages
385-394
ISSN
  • 0277-6693 (ISSN-L)
  • 1099-131X
OpenAlex
W2138107423
Cited by
371
References
0
Citations by year
2026: 9 · 2025: 16 · 2024: 11 · 2023: 19 · 2022: 31 · 2021: 43 · 2020: 29 · 2019: 22 · 2018: 32 · 2017: 28 · 2016: 20 · 2015: 21 · 2014: 27 · 2013: 26 · 2012: 22
FWCI
73.46
Type
journal article
Language
en
Open access
Locations
  • Journal of Forecasting (publishedVersion)
  • Deep Blue (University of Michigan) (submittedVersion)
Funders
University of Pennsylvania
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Market Dynamics and Volatility
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economics of Agriculture and Food Markets
  • Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Monetary Policy and Economic Impact
Keywords
oil prices, global demand shocks, emerging markets, global economic growth

About these checks

Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.

Statistics and arithmetic are recomputed, not judged.

Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.

What counts as a claim ›How we measure confidence ›How we check this ›

Are you an author, or do you see a problem with this page? Request a review