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Crude Oil Prices and U.S. Economic Performance: Where Does the Asymmetry Reside?

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  • Hillard G. Huntington

Abstract

Sustained decreases in crude oil prices appear to affect the U.S. economy differently than sustained increases. This paper shows that a significant part of the observed asymmetry is due to adjustments within the energy sector and not within the rest of the economy. In particular, sustained decreases in petroleum product or general energy prices do not appear to have qualitatively different macroeconomic impacts than do sustained price increases. The singular focus on crude oil price changes in previous studies is misplaced. Moreover, the 1986 oil price collapse did not operate in isolation from other important events. As crude oil prices fell in the 1986 period, other factors caused a major devaluation of the U.S. dollar that had potentially important effects on the U.S. economy.

Suggested Citation

  • Hillard G. Huntington, 1998. "Crude Oil Prices and U.S. Economic Performance: Where Does the Asymmetry Reside?," The Energy Journal, , vol. 19(4), pages 107-132, October.
    • Handle: RePEc:sae:enejou:v:19:y:1998:i:4:p:107-132
    DOI: 10.5547/ISSN0195-6574-EJ-Vol19-No4-5
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    References listed on IDEAS

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    1. Hooker, Mark A., 1996. "What happened to the oil price-macroeconomy relationship?," Journal of Monetary Economics, Elsevier, vol. 38(2), pages 195-213, October.
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    3. repec:aen:journl:1993v14-04-a10 is not listed on IDEAS
    4. repec:aen:journl:1994v15-04-a02 is not listed on IDEAS
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    Cited by:

    1. Rao, Amar & Sharma, Gagan Deep & Tiwari, Aviral Kumar & Hossain, Mohammad Razib & Dev, Dhairya, 2025. "Crude oil Price forecasting: Leveraging machine learning for global economic stability," Technological Forecasting and Social Change, Elsevier, vol. 216(C).
    2. Bhattacherjee, Purba & Mishra, Sibanjan & Kang, Sang Hoon, 2024. "Extreme time-frequency connectedness across U.S. sector stock and commodity futures markets," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 1176-1197.

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