Oil market shocks and financial instability in Asian countries

This paper examines the relationship between oil market shocks and financial instability in Asian countries using a Structural Vector Autoregression (SVAR) following Kilian Park’s (2009) methodology. Instability markets is measured by Financial Stress Index (FSI). Based on impulse response functions, findings confirm that source of an price shock (supply side or demand side) extremely important to markets. When increases as result oil-specific shocks, experience less stress. However, when supply increased The study should be useful for international domestic investors portfolio diversification other investment-production purposes, well stability regulators, such central bankers monetary authorities.