Oil price shocks and the macroeconomy

Paul Segal

Oxford Review of Economic Policy, 2011, vol. 27, issue 1, 169-185

Abstract: This paper examines the impact of oil price shocks and attempts to explain why the rise in oil prices up to 2008 had little impact on the world economy. It makes three main arguments. First, that oil prices have never been as important as is popularly thought. Second, that the most important route through which oil prices affect output is monetary policy: when oil prices pass through to core inflation, monetary authorities raise interest rates, slowing growth. Based on the second argument, the third argument is that high oil prices have not reduced growth in recent years because they no longer pass through to core inflation, so the monetary tightening previously seen in response to high oil prices is absent. It also argues that oil prices had little impact on the global recession of 2008--9. Copyright 2011, Oxford University Press.

Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (42)

Downloads: (external link)
http://hdl.handle.net/10.1093/oxrep/grr001 (application/pdf)
Access to full text is restricted to subscribers.

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:oup:oxford:v:27:y:2011:i:1:p:169-185

Access Statistics for this article

Oxford Review of Economic Policy is currently edited by Christopher Adam

More articles in Oxford Review of Economic Policy from Oxford University Press and Oxford Review of Economic Policy Limited
Bibliographic data for series maintained by Oxford University Press ().