# The Time-Varying Effects of Oil Shocks on the Trade Balance of Saudi Arabia

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## Abstract

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## 1. Introduction

## 2. Review of Previous Studies

## 3. Methodology and Data

#### 3.1. Data

#### 3.2. Methodology

## 4. Empirical Results and Discussion

## 5. Conclusions and Policy Implications

## Author Contributions

## Funding

## Data Availability Statement

## Conflicts of Interest

## References

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**Figure 1.**Oil and non-oil revenues per capita. Source: Gulf Investment Corporation, GCC Economic Statistics, 2021.

**Figure 2.**Time-varying cumulative responses to global oil supply shocks. (

**a**) Time−varying cumulative responses; (

**b**) Time−varying cumulative responses at h = 16 with ±2 standard error bands.

**Figure 3.**Time-varying cumulative responses to domestic oil supply shocks. (

**a**) Time−varying cumulative responses; (

**b**) Time−varying cumulative responses at h = 16 with ±2 standard error bands.

**Figure 4.**Time−varying cumulative responses to oil demand shocks. (

**a**) Time−varying cumulative responses; (

**b**) Time-varying cumulative responses at h = 16 with ±2 standard error bands.

**Figure 5.**Time−varying cumulative responses to the real exchange shocks. (

**a**) Time−varying cumulative responses; (

**b**) Time−varying cumulative responses at h = 16 with ±2 standard error bands.

Variable | ADF | PP | ||
---|---|---|---|---|

Intercept | Trend and Intercept | Intercept | Trend and Intercept | |

${p}_{t}$ | −1.90 | −2.28 | −1.70 | −2.06 |

Δ${p}_{t}$ | −9.24 *** | −9.21 *** | −9.16 *** | −9.12 *** |

${qg}_{t}$ | −1.60 | −1.54 | −1.38 | −2.29 |

Δ${qg}_{t}$ | −10.83 *** | −10.92 *** | −8.81 *** | −8.76 *** |

${qd}_{t}$ | −2.45 | −3.80 ** | −1.94 | −3.52 ** |

Δ${qd}_{t}$ | −9.84 *** | −9.80 *** | −9.91 *** | −9.87 *** |

${reer}_{t}$ | −1.73 | −1.91 | −1.66 | −1.70 |

Δ${reer}_{t}$ | −8.20 *** | −8.16 *** | −9.11 *** | −9.07 *** |

${xm}_{t}$ | −2.87 | −3.10 | −2.28 | −2.51 |

Δ${xm}_{t}$ | −8.69 *** | −8.66 *** | −8.61 *** | −8.56 *** |

Variable | One Endogenous Break | Two Endogenous Breaks | |||
---|---|---|---|---|---|

LM-Stat | ${\mathit{D}}_{1\mathit{t}}$ | LM-Stat | ${\mathit{D}\mathit{T}}_{1\mathit{t}}$ | ${\mathit{D}\mathit{T}}_{2\mathit{t}}$ | |

${p}_{t}$ | −3.52 | 2008Q1 | −4.91 | 2004Q2 | 2014Q4 |

$\Delta {p}_{t}$ | −6.60 *** | 2008Q3 | −9.09 *** | 1993Q4 | 1996Q2 |

${qg}_{t}$ | −3.59 | 2002Q4 | −4.10 | 2004Q3 | 2014Q1 |

$\Delta {qg}_{t}$ | −4.56 *** | 2018Q1 | −6.19 *** | 2001Q1 | 2018Q2 |

${qd}_{t}$ | −4.43 ** | 2011Q2 | 5.03 | 1998Q4 | 2018Q3 |

$\Delta {qd}_{t}$ | −6.64 *** | 2012Q4 | −8.28 *** | 2000Q4 | 2002Q2 |

${reer}_{t}$ | −3.21 | 2006Q2 | −4.36 | 1999Q4 | 2008Q1 |

$\Delta {reer}_{t}$ | −4.85 *** | 1994Q4 | −8.63 *** | 1995Q2 | 2003Q1 |

${xm}_{t}$ | −4.80 *** | 2014Q1 | −6.66 *** | 2004Q3 | 2014Q2 |

$\Delta {xm}_{t}$ | −8.62 *** | 2004Q1 | −8.50 *** | 1993Q4 | 2004Q3 |

Parameter | Mean | Std. Dev. | 95% L | 95% U | CD | Inefficiency |
---|---|---|---|---|---|---|

(${\Sigma}_{\mathsf{\beta}}$)_{1} | 0.056 | 0.017 | 0.029 | 0.094 | 0.001 | 61.690 |

(${\Sigma}_{\mathsf{\beta}}$)_{2} | 0.061 | 0.025 | 0.033 | 0.127 | 0.385 | 51.340 |

(${\Sigma}_{\mathsf{\alpha}}$)_{1} | 0.031 | 0.005 | 0.023 | 0.043 | 0.079 | 6.310 |

(${\Sigma}_{\mathsf{\alpha}}$)_{2} | 0.039 | 0.009 | 0.025 | 0.060 | 0.818 | 14.060 |

(${\Sigma}_{\mathrm{h}}$)_{1} | 0.441 | 0.124 | 0.254 | 0.735 | 0.268 | 14.100 |

(${\Sigma}_{\mathrm{h}}$)_{2} | 0.384 | 0.151 | 0.208 | 0.826 | 0.000 | 51.870 |

Responses | Mean | Max | Min | Standard Deviation |
---|---|---|---|---|

$xm$ to $p$ | 0.212 | 0.656 (2008Q4) | 0.009 (2001Q4) | 0.186 |

$xm$ to $qg$ | −0.039 | 0.024 (2006Q2) | −0.056 (2014Q4) | 0.008 |

$xm$ to $qd$ | 0.026 | 0.081 (2008Q4) | −0.019 (1997Q4) | 0.035 |

$xm$ to $reer$ | −0.041 | −0.029 (1995Q1) | −0.056 (2008Q4) | 0.007 |

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**MDPI and ACS Style**

Helmi, M.H.; Eleyan, M.I.A.; Çatık, A.N.; Ballı, E.
The Time-Varying Effects of Oil Shocks on the Trade Balance of Saudi Arabia. *Resources* **2023**, *12*, 54.
https://doi.org/10.3390/resources12050054

**AMA Style**

Helmi MH, Eleyan MIA, Çatık AN, Ballı E.
The Time-Varying Effects of Oil Shocks on the Trade Balance of Saudi Arabia. *Resources*. 2023; 12(5):54.
https://doi.org/10.3390/resources12050054

**Chicago/Turabian Style**

Helmi, Mohamad Husam, Mohammed I. Abu Eleyan, Abdurrahman Nazif Çatık, and Esra Ballı.
2023. "The Time-Varying Effects of Oil Shocks on the Trade Balance of Saudi Arabia" *Resources* 12, no. 5: 54.
https://doi.org/10.3390/resources12050054