Relationship between Dollar Exchange Rate, Monetary Liquidity and International Oil Price

Abstract:

This paper provides an analysis on three variables based on observation and experiment: Brent oil prices, the dollar exchange rate and the dollar liquidity (M2), and verifies their interactions relations. The analysis shows that the Granger reason of Brent oil price is the dollar exchange rate and extends the Krugmans achievement. The concept of dollar liquidity (M2) illustrates the important role of oil price in global economic system. China should guide the oil price to a reasonable interval by making full use of the top of oil consumption status in the world.

• Periodical: Advanced Materials Research (Volume 773)
• Pages: 939-943
• DOI: https://doi.org/10.4028/www.scientific.net/AMR.773.939
• Online since: September 2013
• Authors: Lan Lan, Qing He, Qiang Liu, Xiao Tong Zhao
• Keywords: Dollar Liquidity, Exchange Rate, Global Economic System, Oil Price

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