Applied Mathematics and Nonlinear Sciences
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Journal

Applied Mathematics and Nonlinear Sciences


Volume
& Issue

Volume 9, Issue 1


Published
on

October 4, 2024


Pages


DOI

Article

A computer simulation study of the impact of the oil crisis on the structure of the world economy in the 1970s

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Authors

Rui Hou Affiliation:
Marxism School, Shaoguan University, Shaoguan, Guangdong, 512005, China.
and Liang Gao Affiliation:
Modern Education Technology Center, Shaoguan University, Shaoguan, Guangdong, 512005, China.


Abstract

The outbreak of the oil crisis in the 1970s had an extremely profound impact on the world economy. The use of computer simulation is employed in this paper to explore how the oil crisis led to the restructuring of the world economy in the 1970s. Taking the United States as a representative, we study its main economic characteristics, such as price and currency in the 1970s oil crisis, and analyze the changes in economic characteristics before and after the oil crisis to provide data support for this paper to simulate the impact of the oil crisis on the structure of the world economy. Adopt the VAR model for computer simulation research. The GDP and CPI data of the United States, Europe, Japan, and other countries in the 1970s are selected to construct the variables of the world economic structure. After analyzing the processed data in terms of the Granger causality test, impulse response, and variance decomposition, this paper concludes that the oil crisis triggered by the increase of oil prices in the 1970s has had a significant impact on the world economic structure and the long-term oil crisis will force countries around the world to actively adjust their economic structure in order to cope with the downturn of the economy caused by the oil crisis.


Keywords

VAR model, Granger causality, Impulse response, Variance decomposition, Oil crisis, 68P30


Citation

Hou, R. & Gao, L. (2024). A computer simulation study of the impact of the oil crisis on the structure of the world economy in the 1970s. Applied Mathematics and Nonlinear Sciences, 9(1). https://doi.org/10.2478/amns-2024-2770

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