What is the impact of oil price changes on French growth ? #(in French)
Muriel BARLET et Laure CRUSSON
The two «oil shocks» of the 1970s reduced the GDP growth rate. Since that period, sudden oil price increases have been considered as a major source of economic slowdown. We estimate VAR models and Markov-Switching models to evaluate the impact of oil price increases on French growth. Our results indicate a breakdown in the relationship between oil prices and economic activity at the beginning of the 1980s. Over the period 1980-2006, our estimations show a slight negative effect of oil price increases only during low-growth phases. Our models also underlight a slowdown in the foreign demand following an oil price increase. The GDP growth rate is indirectly affected by this foreign demand decrease.