Oil price shocks lead to economic turmoil in oil-exporting countries.
The article looks at how oil price changes affect the economies of countries that export a lot of oil. It compares countries with floating exchange rates to those with fixed exchange rates. The study uses data from 24 oil-exporting countries from 1991 to 2019. The results show that when oil prices drop, countries with floating exchange rates see their currency lose value, more money is put into circulation, and government spending goes down. On the other hand, countries with fixed exchange rates have more stable currencies, less money in circulation, and reduced government spending when oil prices fall.