Working Paper: NBER ID: w16790
Authors: James D. Hamilton
Abstract: This paper surveys the history of the oil industry with a particular focus on the events associated with significant changes in the price of oil. Although oil was used much differently and was substantially less important economically in the nineteenth century than it is today, there are interesting parallels between events in that era and more recent developments. Key post-World-War-II oil shocks reviewed include the Suez Crisis of 1956-57, the OPEC oil embargo of 1973-1974, the Iranian revolution of 1978-1979, the Iran-Iraq War initiated in 1980, the first Persian Gulf War in 1990-91, and the oil price spike of 2007-2008. Other more minor disturbances are also discussed, as are the economic downturns that followed each of the major postwar oil shocks.
Keywords: No keywords provided
JEL Codes: E32; Q41; Q43
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Oil price increases (Q31) | Economic downturns (E32) |
| Oil shocks (Q43) | Economic downturns (E32) |
| Supply disruptions (L99) | Oil price increases (Q31) |
| Oil price increases (Q31) | Reduced productivity (O49) |
| Reduced productivity (O49) | Economic downturns (E32) |
| Low short-run elasticity of oil demand (Q47) | Reduced consumer spending (D12) |
| Reduced consumer spending (D12) | Economic downturns (E32) |
| Increased production costs (D24) | Economic downturns (E32) |