The objective of this research concerns identifying whether or not there is a relationship between oil price increases in a given quarter and the likelihood of a recession in the subsequent quarter. The data used is gathered from the St. Louis Fed's Fred II, the National Bureau of Economic Research, and the Energy Information Administration to generate modified variables. These variables are tested using a qualitative dependent variable, recession, in a binary choice model. The findings validated the assumption that oil prices do have a correlation with recessions, and that the relationship is a direct one. Based on the model, an increase in the price of oil will positively affect the likelihood of a "recession" outcome versus the alternative, "no recession". It is anticipated that the results will inspire future research into the causes and effects of oil price surges, as well as the determinants of economic contractions in the future based on policy decisions and economic decision-making practices in the present.
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Bachelor of Arts (B.A.)
College of Business Administration
Business Administration -- Dissertations, Academic;Dissertations, Academic -- Business Administration
Length of Campus-only Access
Honors in the Major Thesis
Restrepo, Valeria, "The impact of oil price surges on economic growth" (2011). HIM 1990-2015. 1234.