An empirical inquiry into the distributional consequences of energy price shocks

Fierro, L. ORCID: https://orcid.org/0000-0002-4378-1375 & Martinoli, M. (2025). An empirical inquiry into the distributional consequences of energy price shocks. Journal of International Money and Finance 159 e103421. 10.1016/j.jimonfin.2025.103421.

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Abstract

We estimate how energy shocks affect the functional distribution of income. Using structural vector autoregressions identified with an external instrument, we find that an increase in oil prices leads to a substantial and long-lasting decline in the wage share. Real aggregate wage income is significantly impacted, with a considerable part of this decline stemming from distributive dynamics. We also investigate possible asymmetries in the response to oil supply shocks, finding that the wage share is more sensitive to negative shocks than to positive ones. This suggests that wage earners lose from oil price hikes more than they benefit from declines.

Item Type:	Article
Research Programs:	Advancing Systems Analysis (ASA) Advancing Systems Analysis (ASA) > Exploratory Modeling of Human-natural Systems (EM)
Depositing User:	Luke Kirwan
Date Deposited:	09 Oct 2025 08:35
Last Modified:	09 Oct 2025 08:35
URI:	https://pure.iiasa.ac.at/20913

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