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The Historical “Roots” of U.S. Energy Price Shocks

Hillard G. Huntington

Year: 2017
Volume: Volume 38
Number: Number 5
DOI: https://doi.org/10.5547/01956574.38.5.hhun
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Abstract:
Sustained energy price increases in the United States have preceded declines in economic activity as far back as 1890. This finding applies to two different historical GDP data sets. It suggests a much longer national experience with rising energy prices that began well before the period after World War Two. This problem emerged well before the U.S. transition towards petroleum products when coal was an important energy source. This relationship varies with the state of the economy and appears less evident during some periods, as in the years following the 1929 stock market crash.



Is Oil Price Still Driving Inflation?

Patricia Renou-Maissant

Year: 2019
Volume: Volume 40
Number: Number 6
DOI: 10.5547/01956574.40.6.pren
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Abstract:
In this paper, we empirically investigate the effects of oil price changes on inflation over the period 1991-2016 for eight industrial countries: the United States, Canada, Japan, Australia, Germany, France, Italy, and the UK. In doing so, we use an oil-augmented Phillips curve with unobserved components and we consider time-varying coefficients. The results show that even over a period of low and stable inflation, oil prices play a significant role in the dynamics of inflation. In all the countries except Germany, oil pass-through into inflation increased from the early 2000s up until the global financial crisis. In the United States it has nearly doubled in the last fifteen years. These findings suggest that central banks must continue to monitor oil prices closely.





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