Oil price shocks lead to unemployment and investment shifts, impacting global economy.
The article examines how oil price shocks affect unemployment, investment, and the current account using a model that considers short-term market imbalances. Depending on the type of shock, unemployment can be either temporary or long-lasting. Investment decreases with temporary unemployment but increases with certain technologies. Current account deficits are higher in certain regions. Lower world interest rates boost investment in specific regions.