Wednesday, January 19, 2011

"Oil shocks and economic recessions"

Sophisticated stuff from Econbrowser:
I've just completed a new research paper that surveys the history of the oil industry with a particular focus on the events associated with significant changes in the price of oil. Here I report the paper's summary of oil market disruptions and economic downturns since the Second World War. Every recession (with one exception) was preceded by an increase in oil prices, and every oil market disruption (with one exception) was followed by an economic recession.

Summary of significant events since World War II. Source: Hamilton (2011).
Business cycle
Nov 47-Dec 47 Nov 47-Jan 48
strong demand,
supply constraints
Nov 48
May 52 Jun 53
yes strike,
controls lifted
Jul 53
Nov 56-Dec 56
Jan 57-Feb 57
Suez Crisis Aug 57
none none no --- Apr 60
none Feb 69 (7%)
Nov 70 (8%)
no strike, strong demand,
supply constraints
Dec 69
Jun 73

Dec 73-Mar 74
Apr 73-Sep 73
Nov 73-Feb 74
yes strong demand,
supply constraints,
OAPEC embargo
Nov 73
May 79-Jul 79 May 79-Jan 80
yes Iranian revolution Jan 80
none Nov 80-Feb 81
yes Iran-Iraq War,
controls lifted
Jul 81
none Aug 90-Oct 90
no Gulf War I Jul 90
none Dec 99-Nov 00
no strong demand Mar 01
none Nov 02-Mar 03
no Venezuela unrest,
Gulf War II
none Feb 07-Jun 08
no strong demand,
stagnant supply
Dec 07
The table above itemizes the particular postwar events that are reviewed in detail in my paper. The paper also provides the following summary discussion...MUCH MORE (read the comments)
I owe someone a hat tip but can't recall which reader this post dropped out of.