TY  - JOUR
AU  - Blanchard,Olivier J.
AU  - Gali,Jordi
TI  - The Macroeconomic Effects of Oil Shocks:  Why are the 2000s So Different from the 1970s? 
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13368
PY  - 2007
Y2  - September 2007
UR  - http://www.nber.org/papers/w13368
L1  - http://www.nber.org/papers/w13368.pdf
N1  - Author contact info:
Olivier J. Blanchard
International Monetary Fund
Economic Counsellor and Director
Research Department
700 19th Street, NW
Rm. 10-700
Washington DC, 20431
Tel: 202-623-7825
Fax: 202-623-7271
E-Mail: blanchar@mit.edu

Jordi Gali
Centre de Recerca en Economia Internacional (CREI)
Ramon Trias Fargas 25
08005 Barcelona
SPAIN
Tel: 011-34-93-5422754
Fax: 011-34-93-5421860
E-Mail: jgali@crei.cat
AB  - We characterize the macroeconomic performance of a set of industrialized economies in the aftermath of the oil price shocks of the 1970s and of the last decade, focusing on the differences across episodes. We examine four different hypotheses for the mild effects on inflation and economic activity of the recent increase in the price of oil: (a) good luck (i.e. lack of concurrent adverse shocks), (b) smaller share of oil in production, (c) more flexible labor markets, and (d) improvements in monetary policy. We conclude that all four have played an important role.
ER  -