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|Title:||Macroeconomics of "Oil Prics" and "Economic Shocks": lessons from the 1970s|
Jindal School of International Affairs
Economic Shocks, the USA
Recession in the U.S.
Oil and the Macroeconomy
|Publisher:||Virtus Interpress, Sumy, Ukraine|
|Citation:||Risk Governance and Control: Financial Markets & Institutions, Vol.5 No.4 (2015) 80-90|
|Abstract:||This paper examines the relationship between oil price shocks and recessions and focuses particularly on the period of stagflation in the 1970s. Nearly every recession in the U.S. since WWII has been preceded by an oil price shock, and examining the literature as to the causal mechanisms finds there are a range of opinions from supply and demand side factors to the precipitated monetary policy response. Evaluating these across a number of countries finds that the mechanisms at play are complex and disputed. This paper reviews the literature and evaluates the various theories put forward before concluding that whilst oil plays a key role in the economy, the recessions following oil price shocks are more likely to be as a result of monetary policy decisions than the oil price shocks per se.|
|Appears in Collections:||JGU Research Publications|
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