Changes in oil prices amplify cyclical fluctuations

The recent war between the United States, Israel, and Iran and the subsequent disruption of oil shipments through the Strait of Hormuz have once again highlighted the significance of oil price shocks for economic development and inflation. Russia’s invasion of Ukraine in 2022 also drove up the price of oil sharply. This text briefly examines what the macroeconomic literature tells us about the effects of oil price shocks. The general effects and earlier observations are described first, after which attention turns to the 2022 oil shock. (AI translation)

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