Reassessing the U.S. Economy’s Vulnerability to Oil Shocks

Danilo Leiva-Leon (), Giovanni Olivei, Ara Patvakanian and Egon Zakrajšek ()

No 26-5, Current Policy Perspectives from Federal Reserve Bank of Boston

Abstract: The impact of today’s oil price shocks may differ markedly from those of shocks in the 1970s. As noted in the minutes of the April 28–29, 2026, Federal Open Market Committee meeting, two structural changes to the U.S. economy could cushion the impact: the substantial increase in domestic oil production and the declining share of spending devoted to energy. This brief examines empirical evidence on how these transformations have altered the U.S. economy’s vulnerability to oil shocks.

Keywords: oil shocks; monetary policy; inflation (finance); employment (search for similar items in EconPapers)
JEL-codes: E23 E3 E52 Q34 Q43 (search for similar items in EconPapers)
Pages: 8
Date: 2026-06-04
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bostonfed.org/publications/current-pol ... lity-oil-shocks.aspx Summary (text/html)
https://www.bostonfed.org/-/media/Documents/Workingpapers/PDF/2026/CPP2605.pdf Full text (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:fip:fedbcq:103365

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Current Policy Perspectives from Federal Reserve Bank of Boston Contact information at EDIRC.
Bibliographic data for series maintained by Catherine Spozio ().