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Energy prices and aggregate economic activity: an interpretive survey

  • Stephen P. A. Brown
  • Mine K. Yücel

In this paper, we survey the theory and evidence linking fluctuations in energy prices to aggregate economic activity. We then briefly examine the implications of this research for both monetary policy and energy policy in response to oil price shocks. Research seems to provide relatively reliable guidance for monetary policy. Because the precise channels through which oil price shocks affect economic activity are only partially known, however, research offers less guidance about how energy policy should cope with oil price shocks.

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File URL: http://www.dallasfed.org/assets/documents/research/papers/2001/wp0102.pdf
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Paper provided by Federal Reserve Bank of Dallas in its series Working Papers with number 0102.

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Date of creation: 2001
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Handle: RePEc:fip:feddwp:0102
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  23. Borenstein, Severin & Cameron, A Colin & Gilbert, Richard, 1997. "Do Gasoline Prices Respond Asymmetrically to Crude Oil Price Changes?," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 305-39, February.
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  41. Evan F. Koenig, 1995. "Optimal monetary policy in an economy with sticky nominal wages," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q II, pages 24-31.
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