Why Recent Increase in Oil Price Has Not Affected Economic Growth in the Industrial Countries?
Article from: OGEL 4 (2004), in Economic and Commercial Context for Oil, Gas and Energy Law
Introduction
Conventional wisdom states that high oil prices lead to lower economic growth, cause inflation, and increase unemployment. The US recessions of the 1970s, 1991, and 2001, were all associated with high oil prices as shown in Figure 1 (available in the full article). The Figure plots real oil prices versus US real economic growth between the first quarter of 1973 and the second quarter of 2004. Contrary to conventional wisdom, the Figure indicates that the recent increase in oil prices has not affected economic growth in the US. The same conclusion applies to most OECD countries and ...