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Oil-induced stagflation: a comparison across major G7 economies and shock episodes

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  • Rebeca Jimenez-Rodriguez
  • Marcelo Sanchez

Abstract

This article finds strong evidence of oil-induced stagflation in major G7 economies. Oil shocks provoked output losses and higher inflation on a widespread basis from the mid-1970s to the early 1980s, as well as - to a lesser extent - in the new millennium.

Suggested Citation

  • Rebeca Jimenez-Rodriguez & Marcelo Sanchez, 2010. "Oil-induced stagflation: a comparison across major G7 economies and shock episodes," Applied Economics Letters, Taylor & Francis Journals, vol. 17(15), pages 1537-1541.
    • Handle: RePEc:taf:apeclt:v:17:y:2010:i:15:p:1537-1541
    DOI: 10.1080/13504850903035923
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    References listed on IDEAS

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    1. Hamilton, James D., 1996. "This is what happened to the oil price-macroeconomy relationship," Journal of Monetary Economics, Elsevier, vol. 38(2), pages 215-220, October.
    2. den Haan, Wouter J. & Sumner, Steven W., 2004. "The comovement between real activity and prices in the G7," European Economic Review, Elsevier, vol. 48(6), pages 1333-1347, December.
    3. Hamilton, James D., 2003. "What is an oil shock?," Journal of Econometrics, Elsevier, vol. 113(2), pages 363-398, April.
    4. Kiseok Lee & Shawn Ni & Ronald A. Ratti, 1995. "Oil Shocks and the Macroeconomy: The Role of Price Variability," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 39-56.
    5. Lutz Kilian, 2008. "A Comparison of the Effects of Exogenous Oil Supply Shocks on Output and Inflation in the G7 Countries," Journal of the European Economic Association, MIT Press, vol. 6(1), pages 78-121, March.
    6. Mork, Knut Anton, 1989. "Oil and Macroeconomy When Prices Go Up and Down: An Extension of Hamilton's Results," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 740-744, June.
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    Cited by:

    1. Berthold, Norbert & Gründler, Klaus, 2012. "Stagflation in the world economy: A revival?," Discussion Paper Series 117, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.

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