NEW WORKING PAPER: I explore the relationship between US-China tensions, US partisan conflict and global oil prices over the last 20 years. Using lag-augmented local projections, I find empirical support for both the scapegoating hypothesis and the “following the flag” hypothesis. For the scapegoating hypothesis, a rise of US partisan conflict lead to an increase in US-China tension and a reduction of the global prices of oil in the medium run. For the “following the flag” hypothesis, a rise in US-China tension lead to a reduction of US partisan conflict and a reduction of the global prices of oil in the short run. Overall, I underline a new channel through with the domestic economy can be influenced by geopolitical tensions.
You are welcome to download, share, or comment on the following working paper:
- Saadaoui, J. (2025). US-China Tensions, US Partisan Conflict and Global Oil Prices: Scapegoating or Following the Flag or both? Available at SSRN 5195676.
