Oil price shocks and US business cycles

A. Qureshi, Irfan and Ahmad, Ghufran ORCID: https://orcid.org/0000-0002-2454-9335 2025. Oil price shocks and US business cycles. Journal of Economic Dynamics and Control 177 , 105132. 10.1016/j.jedc.2025.105132 Item availability restricted.

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Abstract

This paper investigates the macroeconomic effects of oil price shocks on the US economy, focusing on how changes in oil supply expectations impact key indicators. We introduce an instrument to identify these shocks by isolating exogenous fluctuations in daily crude oil futures linked to catastrophic events in major oil-producing countries. These events arise independently of short-term market dynamics, minimizing reverse causality concerns. The shock disrupts oil operations, reduces economic activity, and increases unemployment and inflation, highlighting the role of oil prices in driving business cycles. Comprehensive robustness checks and analysis of other major economies reinforce the validity of our findings.

Item Type:	Article
Date Type:	Publication
Status:	In Press
Schools:	Schools > Business (Including Economics)
Subjects:	H Social Sciences > HB Economic Theory
Publisher:	Elsevier
ISSN:	0165-1889
Date of First Compliant Deposit:	16 June 2025
Date of Acceptance:	13 June 2025
Last Modified:	26 Jun 2025 14:00
URI:	https://orca.cardiff.ac.uk/id/eprint/179087

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