Oil price shocks and the macroeconomy
AbstractThis 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.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Oxford Review of Economic Policy.
Volume (Year): 27 (2011)
Issue (Month): 1 (Spring)
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- KARGI, Bilal, 2014.
"The Effects of Oil Prices On Inflation and Growth: Time Series Analysis In Turkish Economy For 1988:01-2013:04 Period,"
55704, University Library of Munich, Germany.
- KARGI, Bilal, 2014. "The Effects of Oil Prices On Inflation and Growth: Time Series Analysis In Turkish Economy For 1988:01-2013:04 Period," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 29-36.
- Degiannakis, Stavros & Filis, George & Floros, Christos, 2013. "Oil and stock returns: Evidence from European industrial sector indices in a time-varying environment," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 26(C), pages 175-191.
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