 Revisiting the relationship between oil supply news shocks and U.S. economic activity: Role of the zero lower boundNaafey Sardar and Irfan Qureshi Energy Economics, 2024, vol. 132, issue C Abstract: Do oil supply news shocks affect the U.S. economy differently at the zero lower bound? We provide evidence consistent with this hypothesis. Using various U.S. macroeconomic time series data from 1975, we find that the transmission of oil price shocks driven by changes in supply expectations is substantially different at the zero lower bound. These shocks tend to be contractionary when interest rates are higher, and expansionary when monetary policy is operating in the ZLB. Private business investment plays a key role in altering the transmission of oil supply news shocks around the ZLB. The results continue to hold even after controlling for a potentially confounding non-linearity associated with the U.S. shale oil boom. Our empirical investigation should improve our understanding of the role played by policy and structural factors in altering the transmission of oil shocks to the U.S. economy. Keywords: Oil price shocks; Output; Investment; Zero lower bound; Shale oil boom (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:132:y:2024:i:c:s0140988324001786 DOI: 10.1016/j.eneco.2024.107470 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
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