Hostname: page-component-cd9895bd7-7cvxr Total loading time: 0 Render date: 2024-12-25T17:30:04.147Z Has data issue: false hasContentIssue false
  • English
  • Français

The Impact of High Oil Prices on the Economy

Published online by Cambridge University Press:  26 March 2020

Ray Barrell ,
Aurélie Delannoy  and
Dawn Holland
Get access Rights & Permissions [Opens in a new window]

Extract

The rise in global oil prices observed since September 2010 results in part from the social and political instability in the Middle East and North African regions, and in part from longer-term trends reasserting themselves. The unrest sweeping Tunisia earlier this year spread over many surrounding nations, including some major oil producers, such as Algeria and, most significantly, Libya. The Middle East currently supplies about a third of world oil and possesses over half of the world's proven reserves. Clearly, instability in the region automatically raises worries of supply disruptions and possible oil shortage, stimulating speculation and driving world oil prices to new peaks. Speculators have a tendency to overshoot the impact of a supply shock, and in any case supply-driven spikes should remain temporary, fading away as political stability returns.

Type
The UK Economy
Information
National Institute Economic Review , Volume 217 , July 2011 , pp. F68 - F74
Copyright
Copyright © 2011 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Barrell, R., Delannoy, A. and Holland, D. (2011), ‘Monetary policy, output growth and oil prices’, National Institute Economic Review, 215, 1, pp. F37–F43.CrossRefGoogle Scholar
Barrell, R. and Kirby, S. (2008), ‘The budgetary implications of global shocks to cycles and trends in output’, ESRI Budget Outlook, October, Dublin, ESRI.Google Scholar
Barrell, R., Kirby, S. and Liadze, I. (2008), ‘The oil intensity of output’, National Institute Economic Review, 205, 1, pp. 34–8.CrossRefGoogle Scholar
Barrell, R. and Pomerantz, O. (2004), ‘Oil prices and the world economy’, Focus on European Economic Integration, Oesterreichische Nationalbank, 1/2004, pp. 153–78.Google Scholar
Barsky, R. and Kilian, L. (2004), ‘Oil and the macroeconomy since the 1970s’, National Bureau of Economic Research Working Paper no. 10855.Google Scholar
Bernanke, B.S. (2004), ‘Oil and the economy’, Remarks at the Distinguished Lecture Series, Darton College, Albany, GA, 21st October.Google Scholar
Bernanke, B.S., Gertler, M. and Watson, M.W. (1997), ‘Systematic monetary policy and the effects of oil price shocks’, Brookings Papers on Economic Activity, 1, pp. 91–142.CrossRefGoogle Scholar
Blanchard, O. and Gali, J. (2007), ‘The macroeconomic effects of oil shocks: why are the 2000s so different from the 1970s?’, National Bureau of Economic Research Working Paper no. 13897.Google Scholar
Chen, S.-S. (2009), ‘Oil price pass-through into inflation’, Energy Economics, 31, 1, pp. 126–33.Google Scholar
Hamilton, J.D. (1983), ‘Oil and the macroeconomy since World War II’, Journal of Political Economy, 91, 2, pp. 228–48.CrossRefGoogle Scholar
Hamilton, J.D. (1996), ‘This is what happened to the oil price-macroeconomy relationship’, Journal of Monetary Economics, 38, 2, pp. 215–20.CrossRefGoogle Scholar
Hamilton, J.D. (2009), ‘Causes and consequences of the oil shock of 200708’, Brookings Papers on Economic Activity, Spring 2009, pp. 21561.Google Scholar
Herrera, A.M. and Pesavento, E. (2009), ‘Oil price shocks, systematic monetary policy, and the “Great Moderation”’, Macroeconomic Dynamics, 13, 1, pp. 107–37.CrossRefGoogle Scholar
Hooker, M.A. (2002), ‘Are oil shocks inflationary? Asymmetric and nonlinear specifications versus changes in regime’, Journal of Money, Credit and Banking, 34, 2, pp. 540–561.CrossRefGoogle Scholar
International Energy Agency (2007), World Energy Outlook 2007: China and India Insights, Paris, IEA.Google Scholar
Kilian, L. (2008a), ‘The economic effects of energy price shocks’, Journal of Economic Literature, 46, 4, pp. 871–909.Google Scholar
Kilian, L. (2008b), ‘Exogenous oil supply shocks: how big are they and how much do they matter for the U.S. economy?’, Review of Economics and Statistics, 90, 2, pp 216–40.CrossRefGoogle Scholar
Kilian, L. (2009), ‘Not all oil price shocks are alike: disentangling demand and supply shocks in the crude oil market’, American Economic Review, 99, 3, pp. 1053–69.Google Scholar
LeBlanc, M. and Chinn, M.D. (2004), ‘Do high oil prices presage inflation?’, Business Economics, 39, 2, pp. 38–48.Google Scholar
Peersman, G. and Robays, I.V. (2009), ‘Oil and the euro area economy’, Economic Policy, 24, 60, pp. 603–51.CrossRefGoogle Scholar