Exogenous Oil Supply Shocks: How Big Are They and How Much Do They Matter for the U.S. Economy?

  title={Exogenous Oil Supply Shocks: How Big Are They and How Much Do They Matter for the U.S. Economy?},
  author={Lutz Kilian},
  journal={The Review of Economics and Statistics},
  • L. Kilian
  • Published 1 July 2005
  • Economics
  • The Review of Economics and Statistics
The paper proposes a new measure of exogenous oil supply shocks. The timing, the magnitude, and the sign of this measure may differ greatly from current state-of-the-art estimates. It is shown that only a small fraction of the observed oil price increases during oil crisis periods can be attributed to exogenous oil production disruptions. Exogenous oil supply shocks cause a sharp drop of U.S. real GDP growth after five quarters rather than an immediate and sustained reduction in economic growth… 

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