Abstract
The effects of rising oil prices on the US economy are controversial. Most of the studies in this area agree that rising oil prices has depressing effects on the US economy. This paper investigates whether oil price changes are derived by an increase in demand or by a reduction in supply caused by political instability in oil exporting counties. In addition, the paper examines the effects of a significant rise in oil prices, during the financial crises of 2007-2008, on the US economy. The empirical results of the study show that the demand for oil strongly influenced the price of oil during the entire sample period 1973-2009. The effects of the political turmoil were strong in the 1970s and the 1980s but showed very little effect during the latter part. Furthermore, the empirical findings of the paper support those views that the adverse effects of rising oil price in 2007-2008 on tile US economy were not as significant as the adverse effects of financial crises.
| Original language | English |
|---|---|
| Pages (from-to) | 171-180 |
| Number of pages | 10 |
| Journal | Global Review of Business and Economic Research |
| Volume | 8 |
| Issue number | 1 |
| Publication status | Published - 2012 |
Keywords
- petroleum products
- prices
- United States
- economic conditions
- gross domestic product