How do Oil Shocks Transmit Through the US Economy? Evidence from a Large BVAR Model with Stochastic Volatility

This paper employs a large BVAR model with common stochastic volatility to examine the effects of oil supply shocks, global demand shocks and precautionary on 17 U.S. macroeconomic financial market variables from 1986Q1 2019Q2. Generalized impulse response functions calculated using provide time-varying account impacts occurring in each quarter. We also compute standard for sizes evident 2019Q2 2008Q4. The magnitudes generalized vary over time, but fluctuations are not particularly different except during crisis. All have permanent inflationary effects; there is evidence long-run adverse several because despite rising GDP, all negatively affect stock currency markets long term, bond differ.