IAEE Members and subscribers to The Energy Journal: Please log in to access the full text article or receive discounted pricing for this article.

Historical Causes of Postwar Oil Shocks and Recessions

Turbulent petroleum markets and poor economic performance have been making headlines for the last decade. Three major oil shocks (1973-1974, 1979, and 1980-1981) have each been followed by major recessions. While the magnitude and violence of recent oil price changes are unique in postwar experience, the phenomenon of political instability producing disruptions in petroleum supply is not. Hamilton (1983a) observed that all but one of the recessions in the United States since World War II were preceded-typically by about nine months-by a dramatic increase in the price of crude petroleum (see Figure 1).

Purchase ( $25 )

Energy Specializations: Petroleum – Markets and Prices for Crude Oil and Products; Energy Security and Geopolitics – Geopolitics of Energy; Energy and the Economy – Energy as a Productive Input; Energy and the Economy –Economic Growth and Energy Demand; Energy and the Economy – Resource Endowments and Economic Performance; Energy and the Economy – Energy Shocks and Business Cycles

JEL Codes: Q35: Hydrocarbon Resources, Q41: Energy: Demand and Supply; Prices, Q43: Energy and the Macroeconomy, Q38: Nonrenewable Resources and Conservation: Government Policy, L71: Mining, Extraction, and Refining: Hydrocarbon Fuels

Keywords: Oil price shocks, Recessions, Oil price volatility, Oil supply

DOI: 10.5547/ISSN0195-6574-EJ-Vol6-No1-9

Published in Volume 6, Number 1 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


© 2023 International Association for Energy Economics | Privacy Policy | Return Policy