The US moves to cut off Iran’s oil revenues
Have American decision makers considered how the escalation of economic warfare against Iran might affect U.S. interests and allies?
General Alireza Tangsiri, commander of Iran’s Islamic Revolutionary Guard Navy, today reiterated the energy security formula that Tehran has observed for the past 30 years, warning that if Iran is prevented from exporting oil, its neighbors will face similar impediments. Tehran has a variety of well-tested instruments—from undersea mines to terrorist proxies to cyberwarfare—to deliver on that threat, and added incentive to do so, given the explicit Saudi and Emirati coordination with today’s announcement.
As Trump moves to cut off Iran’s oil revenues, what’s his endgame?
By: Suzanne Maloney – Brookings
The co-movement between oil and global inflation volatility
In this paper we study the evolution of inflation rates in many countries, using a novel model that allows for commonality in both levels and volatilities, in addition to country specific components. We find that allowing for inflation volatility is indeed important, and a large fraction of it can be attributed to a global factor that is also driving the inflation levels. While other sources can be behind this global factor, it turns out that since the early ’90s it is strongly correlated with the Chinese PPI and Oil prices.
The global component of inflation volatility
Authors: Andrea Carriero, Francesco Corsello and Massimiliano Marcellino
From: Banca d’ Italia
Are inflation expectations anchored vis a vis oil price changes?
Galati and al. in this paper investigate whether long-term inflation expectations have become de-anchored, by studying whether long-term deflation risk has been affected by changes in oil prices and by short-term deflation risk. They find that that the anchoring properties of euro area inflation expectations have weakened, albeit in a still subtle way.
Deflation risk in the euro area and central bank credibility
Authors: Gabriele Galati, Zion Gorgia, Richhild Moessnera, and Chen Zhou
From: De Nederlandsche Bank, Cass Business School, Erasmus University