Energy price shocks: sweet and sour consequences in developing countries

TL;DRAbstract

This paper discusses the effects of recent energy price changes on developing countries. It reviews the
\ntransmission channels between energy prices and growth and distribution in developing countries
\nbased on the most recent literature; employs a Computable General Equilibrium (CGE) model to identify
\nthe most vulnerable countries; and presents three brief country case studies analysing policy responses
\nto oil shocks in more detail (Nigeria, Malawi and Ghana).
\nThe issue of energy shocks is crucial, as oil prices affect growth. Since Brent oil prices hit a 2011 high of
\n$127 a barrel in April 2011, as the conflict in Libya shut down its supplies, the International Energy
\nAgency (IEA) has repeatedly said that oil prices pose a threat to growth. In 2011, the IEA estimated
\nnominal oil prices of $114 a barrel in 2015, revising its 2010 estimate of $104 a barrel upward. /
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\nOil prices and developing country growth: An increase in oil p

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