A model for teaching oil shocks in a small, open, oil-exporting, and developing economy

Leopoldo Gómez‐Ramírez; Jorge David Quintero Otero · Cuadernos de Economía (2026) · DOI: 10.15446/cuad.econ.v45n97.112096

Resumen

Undergraduate Macroeconomics materials, usually written from the perspective of developed economies, teach that oil price shocks inversely affect equilibrium aggregate demand and output. However, in the context of a small, open, oil-exporting, and developing economy, these outcomes may not always hold true. Thus, this paper presents a model designed for use in undergraduate Macroeconomics and/or Development Economics courses focused on such economies. While drawing primarily from Colombia’s case, its general arguments may have broader applicability. To enhance its educational value, one author has prepared a companion resource with exercises for students, complete with detailed answers.

Instituciones: Pontificia Universidad Católica del Perú