Iranian Journal of Economic Research

The impact of the U.S. Monetary Policy on the Oil Prices and the Oil Revenues of the OPEC members

Authors

Ali Emami Meibodi 1
Mohammad Shamsoddin 2

1 Assistant Professor, Faculty of Economics, Allameh Tbatabaei University

2 PhD Candidate in Economics, Allameh-Tbatabaei University

Abstract
The introduction of the new oil exchanges and development of oil derivatives transactions have dramatically changed the mechanism of oil price movements. Expectations of monetary policies and directions of money flows between the financial and commodity markets have played fundamental roles in deriving  the oil prices in the world markets.This paper investigates the effect of the U.S. monetary policy on the real prices of oil and the real revenues of the OPEC member countries using the Dornbusch’s overshooting model. The results show the negative long run Co-integration between oil prices and the U.S. interest rates. The results of the Random Effect Model also reveal that the difference between the real interest rates of the U.S. and that of the OPEC members has a negative impact on the oil revenues of the OPEC members.

Keywords

Oil price
Oil Revenue
OPEC
US monetary policy

  • Receive Date 30 April 2016
  • First Publish Date 30 April 2016

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