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Economic Commentary

Oil Prices, Monetary Policy, and the Macroeconomy

Recessions are associated with both rising oil prices and increases in the federal funds rate. Are recessions caused by the spikes in oil prices or by the sharp tightening of monetary policy? The authors discuss how to disentangle these two effects.

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit for updates.

Suggested Citation

Carlstrom, Charles T., and Timothy S. Fuerst. 2005. “Oil Prices, Monetary Policy, and the Macroeconomy.” Federal Reserve Bank of Cleveland, Economic Commentary 7/1/2005.