Adjustment to Expected and Unexpected Oil Price Changes

31 Pages Posted: 9 Mar 2004

See all articles by Nancy Peregrim Marion

Nancy Peregrim Marion

Dartmouth College - Department of Economics

Lars E. O. Svensson

Stockholm School of Economics; Stockholm University - Institute for International Economic Studies (IIES); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Date Written: October 1982

Abstract

For oil importers, differences in economic performance after the 1973-74 oil price increase and after the 1979-80 increase can be attributed to a number of factors, including the fact that the 1973-74 oil price increase was unexpected whereas the 1979-80 increase was largely expected. In this paper, we analyze how an economy's adjustment to expected oil price increases might differ from its adjustment to unexpected increases. By expected oil price increases, we shall mean ones that were anticipated in the past, and by unexpected oil price increases, we shall mean those that were not anticipated in the past but occur unexpectedly in the present. We model this distinction using a three- period model, where the periods are called the past, present and future.

Suggested Citation

Marion, Nancy P. and Svensson, Lars E.O., Adjustment to Expected and Unexpected Oil Price Changes (October 1982). NBER Working Paper No. w0997, Available at SSRN: https://ssrn.com/abstract=303489

Nancy P. Marion (Contact Author)

Dartmouth College - Department of Economics ( email )

Hanover, NH 03755
United States
(603) 646-2511 (Phone)

Lars E.O. Svensson

Stockholm School of Economics ( email )

PO Box 6501
Stockholm, 11383
Sweden

HOME PAGE: http://larseosvensson.se

Stockholm University - Institute for International Economic Studies (IIES) ( email )

Stockholm, SE-10691
Sweden

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
22
Abstract Views
685
PlumX Metrics