Commodity price shocks – and, notable among those, energy price shocks– are frequently considered among the most important potential threats to the global economy. However, since the second half of the 1980s, energy prices have experienced very large changes, with arguably limited effects on global GDP developments.
Commodity prices and growth: A changing relationship?
Lúcio Vinhas de Souza, 7 February 2013
Do oil prices help forecast US real GDP? The role of non-linearities and asymmetries
Lutz Kilian, 29 June 2012
There has been much interest since the 1970s in the question of whether lagged oil price changes help forecast US real GDP growth (Hamilton 2009). This question has taken on new urgency following the large fluctuations in the price of oil in recent years.
The price of oil and the state of the world economy: using terrorism as the instrumental variable
Natalie Chen, Liam Graham, Andrew J Oswald, 17 August 2008
There is both casual and formal evidence from the post-war period that abrupt movements in the price of oil have significant effects on the macroeconomy, as neoclassical economic theory would predict. Higher energy prices are likely to reduce profitability of industry and thus could bring about an economic downturn.
Topics: Energy, Global economy
Tags: economic recession, energy prices, profitability, terrorism
Spiralling oil prices: not such a shock?
Paul Edelstein, Lutz Kilian, 6 June 2007
Oil shocks have a chilling reputation for wrecking economies: memories of fuel rationing and recession in the 1970s mean a sudden jump in the price of a barrel of crude is assumed to have a singularly disastrous effect on GDP growth today.
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