The Macroeconomic Effects of Oil Shocks: Why are the 2000s so Different from the 1970s?

Olivier Blanchard and Galí, Jordi
Authors registered in the RePEc Author Service: Jordi Galí

No 6631, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We characterize the macroeconomic performance of a set of industrialized economies in the aftermath of the oil price shocks of the 1970s and of the last decade, focusing on the differences across episodes. We examine four different hypotheses for the mild effects on inflation and economic activity of the recent increase in the price of oil: (a) good luck (i.e. lack of concurrent adverse shocks), (b) smaller share of oil in production, (c) more flexible labour markets, and (d) improvements in monetary policy. We conclude that all four have played an important role.

Keywords: Great moderation; Monetary policy credibility; Real wage rigidities; Sticky prices (search for similar items in EconPapers)
JEL-codes: E32 (search for similar items in EconPapers)
Date: 2008-01
New Economics Papers: this item is included in nep-bec, nep-cba, nep-ene and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (65)

Downloads: (external link)
https://cepr.org/publications/DP6631 (application/pdf)

Related works:
Working Paper: The Macroeconomic Effects of Oil Shocks: Why are the 2000s So Different from the 1970s? (2007)
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:cpr:ceprdp:6631

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP6631

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().