Oil Price Shocks and Economic Growth: The Evidence from Kyrgyzstan

Abstract

Starting from the second half of the 20th century many investigators focused their attention on increasing influence of oil price shocks on global economic performance. However, current stock of empirical literature significantly lacks the research on developing oil importing economies from post-Soviet region. The purpose of the present paper is to empirically analyze the essence of relationship between oil price shocks and economic growth in the case of the Kyrgyz Republic. Following an in-depth analysis of the macroeconomic structure of the country, it will be demonstrated that despite of the oil importing status of the economy of the Kyrgyz Republic, abrupt increases in crude oil prices would indirectly benefit the pace of economic growth, whereas abrupt decreases would not induce any visible impact.