Working Paper

Energy prices and aggregate economic activity: an interpretive survey


Abstract: In this paper, we survey the theory and evidence linking fluctuations in energy prices to aggregate economic activity. We then briefly examine the implications of this research for both monetary policy and energy policy in response to oil price shocks. Research seems to provide relatively reliable guidance for monetary policy. Because the precise channels through which oil price shocks affect economic activity are only partially known, however, research offers less guidance about how energy policy should cope with oil price shocks.

Keywords: Energy policy; Monetary policy; Petroleum industry and trade;

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Bibliographic Information

Provider: Federal Reserve Bank of Dallas

Part of Series: Working Papers

Publication Date: 2001

Number: 0102

Pages: 29 pages

Note: Published as: Brown, Stephen P.A. and Mine K. Yücel (2002), "Energy Prices and Aggregate Economic Activity: An Interpretative Survey," The Quarterly Review of Economics and Finance 42 (2): 198-208.