A Comparative Study Of Influence Of Crude Oil Price On Economy Of China And U.S.

Under the wave of soaring crude oil price, the thesis attempts to explore the inter-relationship between 4 variables--- that is international crude oil spot price and futures price, GDP of China and U.S. for the purpose of comparing different influence of crude oil price on economy of each country. The author applies time series analysis including techniques of ADF test, co-integration in multivariate system, and variance decomposition. The thesis finds that in long term, continues rising of crude oil price will do negative effect to China's economy. In comparison of different influence of crude oil price on the economy of China and U.S., China's economy is more vulnerable to crude oil spot price. On the contrary, fluctuation of crude oil futures price contributes more than that of spot price to the change of U.S economy, which is attributable to hedging function of a mature futures market. However, since empirical time series analysis does not provide complete perspective for the issue, some relative factors such as exchange rate, stock price, trades should also be taken into consideration. In short, further development of China's economy is indispensable of crude oil which is one of the most important finite resources. By establishing an efficient futures market, China can provide a better investment platform for enterprises to actively involve in international economic activities.