How do consumers interpret the macroeconomic effects of oil price fluctuations? Evidence from U.S. survey data

Martin Geiger (martin.geiger@uibk.ac.at) and Johann Scharler

Working Papers from Faculty of Economics and Statistics, Universität Innsbruck

Abstract: We use survey data to study how consumers assess the macroeconomic effects of structural oil market shocks on the U.S. economy using vector autoregressive models. To structurally decompose oil price changes, we impose sign restrictions on impulse responses. We find that the survey respondents' expectations are qualitatively in line with the actual developments in most cases. Nevertheless, survey respondents underestimate the adverse effects of oil market shocks in some cases. We also find that respondents expect the central bank to stabilize inflation as well as output and that expectations are consistent with a standard Taylor rule.

Keywords: Macroeconomic Expectations; Michigan Survey; Structural Vector Autoregression; Zero and Sign Restrictions (search for similar items in EconPapers)
JEL-codes: D84 E00 E32 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2018-07
New Economics Papers: this item is included in nep-ene and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www2.uibk.ac.at/downloads/c4041030/wpaper/2018-13.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inn:wpaper:2018-13

Access Statistics for this paper

More papers in Working Papers from Faculty of Economics and Statistics, Universität Innsbruck Contact information at EDIRC.
Bibliographic data for series maintained by Judith Courian (dean-econstat@uibk.ac.at this e-mail address is bad, please contact repec@repec.org).