This paper explores the effect of news shocks on the current account and other macroeconomic variables using worldwide giant oil discoveries as a directly observable measure of news shocks about future output - the delay between a discovery and production is on average 4 to 6 years. We first...

Can oil discovery shocks affect the demand for protectionism? An intertemporal model of Dutch disease indicates that if the tradable sector is politically dominant then an oil discovery can induce protectionism. If the economy is also credit constrained, this effect is intensified upon...

Major oil and gas discoveries are often associated with excitement and jubilation among citizens and government officials. But the extent to which discoveries substantially alter citizen expectations about economic conditions in a country remains an open question. The paper combines...