The dynamic relationship between the US GDP, imports and domestic production of crude oil

Abstract

This article investigates the dynamic relationship between crude oil imports, gross domestic product (GDP) and domestic crude oil production of the United States using a Vector Error Correction model estimation, generalized impulse response functions, persistence profile and variance decompositions. This article results suggest that the GDP has a leading role in determining oil imports.

Acknowledgements

The author would like to thank an anonymous referee for exceptionally insightful and constructive comments. Similarly, the author would like to thank Prof. Abul M. M. Masih and Mr Lurion De Mello for their comments which helped to improve this article.