Declining effects of oil price shocks

Munechika Katayama*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

25 Citations (Scopus)


In recent years, output responses to oil price shocks have not only been weaker, but have also reached their trough earlier. This paper builds a model that incorporates a realistic structure of U.S. petroleum consumption and explores three possible explanations for the changes. The possible factors considered are (i) deregulation in the transportation industry, (ii) improved energy efficiency, and (iii) a lower degree of persistence of oil price shocks. Under realistic parameter values, the three factors play an important role quantitatively, accounting for half of the reduction in the largest impact on output of an oil price shock over time.

Original languageEnglish
Pages (from-to)977-1016
Number of pages40
JournalJournal of Money, Credit and Banking
Issue number6
Publication statusPublished - 2013 Sept
Externally publishedYes


  • Deregulation
  • Oil price shocks
  • Recessions
  • Transportation

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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