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This paper documents the determinants of real oil price in the global market based on SVAR model embedding transitory and permanent shocks on oil demand and supply as well as speculative disturbances. We find evidence of significant differences in the propagation mechanisms of transitory versus permanent shocks, pointing to the importance of disentangling their distinct effects. Permanent supply disruptions turn out to be a bigger factor in historical oil price movements during the most recent decades, while speculative shocks became less influential.

This paper documents the determinants of real oil price in the global market based on SVAR model embedding transitory and permanent shocks on oil demand and supply as well as speculative disturbances. We find evidence of significant differences in the propagation mechanisms of transitory versus permanent shocks, pointing to the importance of disentangling their distinct effects. Permanent supply disruptions turn out to be a bigger factor in historical oil price movements during the most recent decades, while speculative shocks became less influential.

The aim of this paper is to examine the inter-temporal relationship between government revenues and expenditures within a trivariate framework by modeling them together with gross domestic product. Our sample is based on a panel of 6 countries of the Gulf Cooperation Council (GCC) i.e. Saudi Arabia, Kuwait, United Arab Emirates, Qatar, Oman and Bahrain, for the period from 1990 to 2010. We perform an econometric model based on the Toda and Yamamoto procedure. Our empirical results show that government expenditures Granger cause government revenues for Qatar and the United Arab Emirates only, while government revenues Granger cause government expenditures for Saudi Arabia only. We also found a unidirectional causality running from government expenditures to GDP in Bahrain only. Regarding Kuwait, Qatar and Saudi Arabia, GDP Granger cause government revenues while GDP Granger cause government expenditures for Oman and Qatar.

Trade liberalisation has affected the flow of trade (goods and
services) between developed and developing countries. The
Heckscher-Ohlin trade theory reveals that under free trade, developing
countries would specialise in the production of those goods that are
produced by relatively abundant factors of production such as labour and
natural resources. Developed countries would specialise in the
production of those goods that are produced by human capital and
manufactured in capital-intensive activities. Trade openness entails
movement of goods produced in one country for either consumption or
further processing to other country. Production of those goods is not
possible without the effective use of energy. Trade openness affects
energy demand via scale effect, technique effect and composite effect.
Other things being same, trade openness increases economic activities,
thus stimulates domestic production and hence economic growth. A surge
in domestic production increases energy demand , which is commonly
referred as scale effect. Such scale effect is caused by trade openness.
Economic condition of the country and extent of relationship between
economic growth and trade openness determine the impact of trade
openness on energy consumption [Shahbaz, et al. (2013); Cole (2006)].
Trade openness enables developing economies to import advanced
technologies from developed economies. The adoption of advanced
technology lowers energy intensity. The use of advanced technologies
result in less energy consumption and more output that is usually
referred to as technique effect [Arrow (1962)]. Composite effect reveals
the shift of production structure from agriculture to industry with the
use of energy intensive production techniques. In initial stages of
economic development economy is based largely on agriculture sector,
thus the use of energy is relatively less. As economy starts shifting
from agriculture to industry, the energy consumption
increases.