Contributions

  • Gal,̕ Jordi, 1961- - Contributor
  • Massachusetts Institute of Technology. Dept. of Economics - Contributor

Publication

2008 - Massachusetts Institute of Technology, Dept. of Economics, Cambridge, MA, Massachusetts

Language

English

Word Count

18,750 words, Guess

Page Count

75 pages

Identifiers

Description

We characterize the macroeconomics performance of a set of industrialized economies in the aftermath of the oil price shocks of the 1970s and of the last decade, focusing on the differences across episodes. We examine four different hypotheses for the mild effects on inflation and economic activity of the recent increase in the price of oil: (a) good luck (i.e. lack of concurrent adverse shocks), (b) smaller share of oil in production, (c) more flexible labor markets, and (d) improvements in monetary policy. We conclude that all four have played an important role. Keywords: oil, oil price, inflation, credibility, oil share, Great moderation, supply shocks, stagflation, monetary policy, real wage rigidities. JEL Classifications: E20, E32, E52.

Subjects

Series Statement

  • Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 07-21 [2008 revision]
  • Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 07-21, 2008.

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