The Russian-Ukraine Conflict, Crude Oil Price Fluctuation, and Dynamic Changes in China’s and American Manufacturing

Biao Wang

doi:10.54691/bcpbm.v30i.2424

Authors

Biao Wang

DOI:

https://doi.org/10.54691/bcpbm.v30i.2424

Keywords:

Geopolitical conflict; oil price volatility; manufacturing index; VAR modeling.

Abstract

This study examines how responsive the manufacturing indices of China and the United States are to changes in the price of WTI crude oil over the three months prior to and following the Russian-Ukrainian Conflict, paying particular attention to changes in the manufacturing index brought on by volatile oil prices. To assess the static and dynamic effects of changes in crude oil prices on the manufacturing indices in China and the US, this study uses a time series model. The use of a VAR(p) model to clearly correlate WTI crude oil price volatility with the Russian-Ukrainian Conflict is the distinguishing feature. The empirical results demonstrate a strong correlation between the size of China's and the US manufacturing index's oscillations in response to geopolitical shocks. Both countries' manufacturing indices are highly susceptible to changes in WTI crude oil prices.

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