This research examines how monetary policy has affected crude oil prices after the subprime mortgage crisis. Our earlier research (Taghizadeh-Hesary F, Yoshino N, OPEC Energy Rev 38(1):1–20, 2014) found a significant impact of easy monetary policy on energy prices from 1980 to 2011. This chapter reports that the quantitative easing of United States (US) monetary policies weakened the US dollar by shifting US investors to invest in the oil market and other commodity markets. An empirical analysis shows that the weaker exchange rate of the dollar pushed up the oil price in 2009–2012, while world gross domestic product was not significant at all since the global economy was in a recession in that period. This trend had the effect of imposing a longer recovery time on the global economy, as oil has been shown to be one of the most important production inputs.
CITATION STYLE
Monetary Policy and the Oil Market. (2016). https://doi.org/10.1007/978-4-431-55797-5
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