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Working Paper

Oil Prices, Monetary Policy, and Counterfactual Experiments

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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? This paper discusses the difficulties in disentangling these two effects.
10.01.2005ISSN 2573-7953 WP 05-10DOI 10.26509/frbc-wp-200510

Working Papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment on research in progress. They may not have been subject to the formal editorial review accorded official Federal Reserve Bank of Cleveland publications. The views expressed in this paper are those of the authors and do not represent the views of the Federal Reserve Bank of Cleveland or the Federal Reserve System.

Suggested Citation

Carlstrom, Charles T., and Timothy S. Fuerst. 2005. “Oil Prices, Monetary Policy, and Counterfactual Experiments.” Federal Reserve Bank of Cleveland, Working Paper No. 05-10. https://doi.org/10.26509/frbc-wp-200510