Persian Gulf War

Effects of war in the Persian Gulf on the U.S. Economy

Okruhlik notes that "state strategies chosen to manage crises- like price booms and busts, worldwide recession, and war- have very real, though unintended, social and political consequences" (p. 297). This essay analyzes the relationship between Persian Gulf War and its impact on U.S. economy. The writer tries to explore impacts of conflict in Middle East and how it results as an increase in oil prices as well fluctuation in stock markets.

The previous research show that, oil price shocks have an asymmetric effect on economic activity and the stock market such that increases in oil prices have a larger impact than oil price decreases.

As the Gulf Coast was hit and many of the oil production and distribution facilities were damaged, world oil prices experienced a dramatic increase in the aftermath of the hurricanes. A few...
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